What is present value of annuity

Assignment Help Financial Management
Reference no: EM131834948

A 12-year annuity pays $2,900 per month, and payments are made at the end of each month. The interest rate is 8 percent compounded monthly for the first eight years, and 6 percent compounded monthly thereafter. What is the present value of the annuity?

Reference no: EM131834948

Questions Cloud

Make regular savings contributions : Piotr plans to make regular savings contributions of 9,600 dollars per year for 5 years.
Expected to generate fixed annual cash flows : What is the value of a building that is expected to generate fixed annual cash flows of 96,700 dollars every year for a certain amount of time
Expected to generate no cash flows for several years : A building is expected to generate no cash flows for several years and then generate annual cash flows forever.
Present value of the annual cash flow : What is the present value of the annual cash flow that is expected in 3 years from today?
What is present value of annuity : The interest rate is 8 percent compounded monthly for the first eight years and 6 percent compounded monthly thereafter. What is the present value of annuity?
What is the expected annual return for her account : Sasha plans to retire in 4 years from today with 196,221 dollars in her account. what is the expected annual return for her account?
The amount of each payment : Siri plans to retire in 5 years with 425,000 dollars in her account, what is X, the amount of each payment?
What is the monthly interest rate : what is the monthly interest rate that Mary Jo is being charged by Fairfax Boats?
The price of the boat is the same at both dealerships : Fatima wants to buy a boat that is available at two dealerships. The price of the boat is the same at both dealerships.

Reviews

Write a Review

Financial Management Questions & Answers

  Retirement increases the benefits of compound interest

Starting to invest early for retirement increases the benefits of compound interest. If the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series. The marke..

  Project is expected to create operating cash flows

A project is expected to create operating cash flows of $35,000 a year for four years. The initial cost of the fixed assets is $100,000. These assets will be worthless at the end of the project. An initial $5,000 of net working capital will be requir..

  Bonds with call option and bonds with convertible option

One of the following embedded options will decrease the required rate of return by bondholders if other factors are constant. What is it? (1) Bonds with call option (2) bonds with convertible option (3) straight bonds (4) bullet bonds

  Uses the proceeds to repurchase shares

Bruce & Co. expects its EBIT to be $49,000 every year forever. The company can borrow at 8 percent. The company currently has no debt, and its cost of equity is 11 percent. If the tax rate is 35 percent, what is the value of the company? What will th..

  What must be the expected return to stock

The returns on stocks A and B are perfectly negatively correlated ( pab = - 1). What must be the expected return to stock B?

  The bonds make semiannual payments

Stone Sour Corp. issued 20-year bonds 6 years ago at a coupon rate of 7.30 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? (Round your answer to 2 decimal places. (e.g., 32.16)..

  What is the price if markup

Sosa Company has $39 per unit in variable costs and $1,900,000 per year in fixed costs. Demand is estimated to be 138,000 units annually. What is the price if a markup of 35% on total cost is used to determine the price?

  Argue for or against an established business finance theory

Argue for or against an established business finance theory or practice - Choose a stance you believe in and write down why you believe in the stance.

  Consumer debt outstanding

Assume you have $23,000 in consumer debt outstanding. The average annual interest rate on credit cards was 17%. The average rate on home equity credit lines was 6%. If you borrow the $23,000 through a home equity line, what would your after-tax cost ..

  Is it better off selling this loan without recourse

what does it expect to receive if the loan is sold with recourse? Is it better off selling this loan without recourse? Why?

  Federal-plus-state corporate tax rate

Fredrickson Corp. has $10 million of 5% bonds outstanding. Assume that all of the MM assumption is met, and the firm is subject to a 38% federal-plus-state corporate tax rate. The firm has an EBIT of $1.5 million, and the unlevered cost of equity is ..

  Calculating the present value and future value of a lump sum

Describe in detail the differences and similarities in calculating the present value and future value of a lump sum, annuity, perpetuity and A series of unequal (multiple) cash flows.

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