Future value of each annuity given its characteristics

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Reference no: EM131993132

1. The following table describe the characteristics of 5 annuities. Calculate the future value of each annuity given its characteristics.

deposit Annual Annuity payment Interest rate Annuity by length.

A $ 2,500 8 percent 10

B $ 500 12 percent 6

C $ 1,000 20 percent 5

D $ 12,000 16 percent 8

E $ 4,000 14 percent 30

2. Thorpe Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, soits costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 4% per year. If the most recent dividend, D0, was $3 and the required rate of return on the stocks, rs, is 11%, what is the value of Thorpe Mountain's stock?

A. $22.42 B. $19.20 C. $ 29.06 D. $14.53

Reference no: EM131993132

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