Premiums are returned with interest

Assignment Help Financial Management
Reference no: EM131914375

A deferred annuity on (40) provides for an income of 1000 per year for life beginning at age 60.If (40) lives to age 60, the first 10 annuity payments are guaranteed regardless of whether (40) is alive or not. Level annual pre- miums of P are payable for 10 years, beginning at age 40. If (40) dies before the annuity begins, all premiums paid prior to death are returned at the end of the year of death, and no annuity payments are made. Find a formula for P, assuming (a) premiums are returned without interest, (b) premiums are returned with interest.

Reference no: EM131914375

Questions Cloud

What is contribution margin per unit when product is sold : What is the contribution margin per unit when the product is sold at the regular price? Do you recommend Widgets accept special order? Explain why or why not.
Current required rate of return : What is Dr. Francesco Totti portfolio's current required rate of return? What approach is used best for this problem
Explain what reich meant : Former Secretary of Labor Robert Reich: "The era of big government may be over, but the era of regulation through litigation has just begun.
What is the yield to call : The par value of the bonds is $1,000. If the yield to maturity is 7 percent, what is the yield to call?
Premiums are returned with interest : Find a formula for P, assuming (a) premiums are returned without interest, (b) premiums are returned with interest.
Compute the target cost for the slim slicer : Compute the target cost for the Slim Slicer. When is target costing particularly helpful in deciding whether to produce a given product?
Customers waiting during the repair process : In the economic analysis of the waiting line system, the company uses $45 per hour cost for customers waiting during the repair process.
Calculate the federal estate tax due on estate : When Jacob Kohler died unmarried in 2015. Use Worksheet 15.2 and Exhibit 15.7 and Exhibit 15.8 to calculate the federal estate tax due on his estate.
What is the lowest possible per shovel price : What is the lowest possible per shovel price that Merton can offer for the contract and still create value for its stockholders?

Reviews

Write a Review

Financial Management Questions & Answers

  Expanding rapidly-currently needs to retain all of earning

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $0.75 coming 3 years from toda..

  Analyze this using euac measure and marr

Analyze this using an EUAC measure and a MARR of 15% to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $65,000.

  Determine their investment plan for the year

It is January 2nd and senior management of Digby meets to determine their investment plan for the year.

  What is primes debt-to-equity ratio

Prime Inc. has an after-tax WACC of 10.58% (EAR). The company’s cost of equity is 13.4% (EAR) and its semi-annual coupon bonds have a yield-to-maturity of 7.8% (APR, semi-annually compounded). The tax rate is 35%. What is Prime’s debt-to-equity (D/E)..

  What is the projects total nominal cash flow from assets

Etonic Inc. is considering an investment of $384,000 in an asset with an economic life of 5 years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $264,000 and $89,000, respectively. All corp..

  When implementing credit and collection policies

If you were a billing manager what should you consider when implementing credit and collection policies?

  Considering new three-year expansion project

Quint Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.58 million.

  Calculate the present value of growth opportunities

Calculate the Present Value of Growth Opportunities [PVGO] based on: Earnings Per Share = $8.00, Required Rate of Return = 14%, Dividends Per Share = $1.50, Return on Equity = 16%. If an investor is willing to pay a P/E multiple that is no higher tha..

  What is the estimated annual operating cash flow

A company is considering a 5-year project to open a new product line. A new machine with an installed cost of $110,000 would be required to manufacture their new product, which is estimated to produce sales of $80,000 in new revenues each year. If st..

  How many years is it until this bond matures

The Lo Sun Corporation offers a 6.0 percent bond with a current market price of $788.50. The yield to maturity is 8.40 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?

  What is its premium or discount as a percent of NAV

The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $470 million. It has liabilities of $5 million and 10 million shares outstanding. If the fund sells for $45 a share, what is its premium or discount as a percen..

  Which of the was not recommended for effective training

Which condition does not limit a chief executive's discretion to make major changes in the strategy of an organization?  When the competition is intense and the environment is changing rapidly, it is especially important to:  Which of the following..

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