Payments is equal to the present value of annuity

Assignment Help Financial Management
Reference no: EM131955619

A man plans to retire on his 65th birthday in precisely four years’ time. The government will pay him a pension from age 68 of $10000 per annum monthly in advance. The man would like to purchase an annuity so that his income, including the government pension, is $16000 per annum paid monthly in advance from age 65 until his 78th birthday. He is to purchase the annuity by a series of payments made over four years quarterly in advance starting immediately.

Calculate the quarterly payments the man has to make if the present value of these payments is equal to the present value of the annuity he wishes to purchase at a rate of interest of 5% per annum e?ective. Mortality should be ignored.

Reference no: EM131955619

Questions Cloud

What is net rate of return : What is the net rate of return that you expect on your ADRs for the next year?
What is the difference between smallpox and measles : Is Smallpox the same as measles. What is the difference between smallpox and measles.
What will be your average price per share : You want to immediately sell 500 shares of FB on the market. What will be your average price per share?
Find the present value of cash flow stream : Find the present value of a cash flow stream of $100 per year for the first 2 years and $200 per year for the next 2 years, given a 12% discount rate.
Payments is equal to the present value of annuity : Calculate the quarterly payments the man has to make if the present value of these payments is equal to the present value of the annuity
Current research on meeting the needs of business : COM201 Business Communication assigment - You have been asked by your company, to submit a paper to one of the leading management journals
What statement is accurate regarding given relationship : 1. What statement is most accurate regarding the relationship between marriage and homelessness? 2. is to psychological empowerment, as is to social alienation.
Annually to live comfortably while retired : You believe you will need $150,000 annually to live comfortably while retired.
What p-value tell you in statistical significance testing : What does the p-value tell you in statistical significance testing? What is the difference between practical and statistical significance?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd