What is the present value of an ordinary annuity

Assignment Help Financial Management
Reference no: EM13881166

What is the present value of an ordinary annuity that pays $40 every 6 months, for 10 years, if the interest rate is 8.0 percent per year, compounded semi-annually?

Reference no: EM13881166

Questions Cloud

Tennessee harvester corporation issued debenture bonds : 1.On January 1, 2013, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
The parties (who is the plaintiff : the Parties (Who is the plaintiff?  The defendant?  The appellant?  The appellee?)  the History of the case (Who won at trial court?  Who won at the lower appellate level?  Who won in this decision?) the Facts (What happened that caused the plainti..
Real interest rates compared to nominal interest rates : You observe that the current interest rate on short-term U.S. Treasury bills is 2.64 percent. You also read in the newspaper that the GDP deflator, which is a common macroeconomic indicator used by market analysts to gauge inflation rate, currently i..
What is the present value of an annuity : What is the present value of an annuity due that pays 250 dollars per year for 4 years, if the appropriate discount rate is 5.0 percent per year, compounded annually?
What is the present value of an ordinary annuity : What is the present value of an ordinary annuity that pays $40 every 6 months, for 10 years, if the interest rate is 8.0 percent per year, compounded semi-annually?
What the relationship of the individual citizen : What  the relationship of the individual citizen to the federal government and to the state government under the proposed Constitution? How does the relationship come to terms with the idea that a republic must "guard one part of society against the ..
What is the main goal for accounting rules : What is the main goal for accounting rules in the United States and around the world? What characteristics must financial information possess to reach that goal?
What is the net present value of the factory : A factory costs $860,000. You reckon that it will produce an inflow after operating costs of $176,000 a year or 10 years. If the opportunity cost of capital is 12%, what is the net present value of the factory? What will the factory be worth after ni..
Compounding factors-discounting factors and financial risk : Most of us intuitively understand that a dollar required today does not have the same value as a dollar needed (or utilized) in the future. This is due to several factors including interest rates, compounding factors, discounting factors and financia..

Reviews

Write a Review

Financial Management Questions & Answers

  Value of an asset expected to provide cash inflows

Laura Drake wishes to estimate the value of an asset expected to provide cash inflows of $3000 per year at the end of years 1 through 4 and $15000 at the end of year 5. Her research indicates that she must earn 10% on low risk assets, 15% on average ..

  What is apples beta coefficient

Apple Inc.’s annual stock returns for the last five years are: 146.81%, 53.09%, 25.55%, 32.56%, and 8.06%. The S&P 500 Index’s annual returns for the last five years are: 23.45%, 12.78%, 0.00%, 13.41%, and 29.60%. What is Apple’s beta coefficient?

  Calculate the rate of return in percentage

Calculate the present value of $100 in 3 years using 6.8% interest rate with continuous compounding. Suppose the futures price becomes $1,523 next month and he sells to close the futures. Calculate the rate of return in percentage up to 2 decimal poi..

  Considering purchasing security system costing

PHP inc. is considering purchasing a security system costing $642,000. The equipment will be depreciated as 5-year property under MACRS, which provides for depreciation allowance percentages of 20%, 32%, 19.20%, 11.52%, 11.52%, and 5.76% respectively..

  What will be the value of investment

If a nurse deposits $1,000 today in a bank account and the interest is compounded annually for 12 percent, what will be the value of this investment: Five years from now

  What is the present value of the settlement

You expect to receive $5,500 in 9 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 7.25%.

  Changes affected the accounts payable period

The Fried Green Tomato Restaurant increased its operating cycle from 140 days to 148 days while the cash cycle decreased by 3 days. How have these changes affected the accounts payable period?

  What is the operating cash flow and cash flow to creditors

Weiland Co. shows the following information on its 2014 income statement: sales = $162,500; costs = $80,000; other expenses = $3,300; depreciation expense = $9,000; interest expense = $6,500; taxes = $22,295; dividends = $8,150. In addition, you're t..

  The principal-agent problem arises because

The principal-agent problem arises because _____ Buying bonds in a firm that has a high net worth is beneficial to the investor because _____.  Governments regulate financial systems because _____

  Dividends are expected to grow at a constant rate

The stock’s current dividend is $1.00, and dividends are expected to grow at a constant rate of 3.5% per year. The intrinsic value of a stock should equal the sum of the present value of all of the dividends that a stock is supposed to pay in the fut..

  What will be the after-tax cash flow of this sale

Suppose you sell a fixed asset for $128,000 when it's book value is $161,000. If your company's marginal tax rate is 28%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

  Demand and supply shocks

Demand and Supply Shocks Which of the following can be inflationary?

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