What is the present value of the annuity

Assignment Help Finance Basics
Reference no: EM132396720

Suppose you invest $100 in a bank account paying 5% interest and you withdraw the interest each year. Instead of leaving the $100 in forever, you close the account and withdraw the principal in 20 years. Given that the current price of a 20-year zero-coupon bond with face value $100 is $37.69, can you please tell me what is the present value of the annuity?

Reference no: EM132396720

Questions Cloud

Timeline of cash flows and npv : Suppose you invest $100 in a bank account paying 5% interest and you withdraw the interest each year. Instead of leaving the $100 in forever
Why the npv decision rule might provide larry : Can you explain to me why the NPV decision rule might provide Larry with a different decision outcome than the IRR rule when evaluating Larry's three-movie deal
What is the maximum adverse daily yield : What is the maximum adverse daily yield move given that we desire no more than a1 per cent chance that yield changes will be greater than this maximum?
What is the price of a 1-year call option : What is the price of a 1-year call option with a strike price of 30 dollars on a stock that is currently trading at 28 dollars?
What is the present value of the annuity : Given that the current price of a 20-year zero-coupon bond with face value $100 is $37.69, can you please tell me what is the present value of the annuity?
Draw three separate cash flows with a timeline : Can you help me draw three separate cash flows with a timeline each: one for the initial investment, one from an annuity, and another one from a zero-coupon
What is the rate determining step at each temperature : CHEM570-Draw a detailed and labeled diagram to show how the authors determined whether there was a viscosity effect for a particular mutant IGPS E210Q.
How much will be in the person''s account after 10 years : The individual will leave the money in the bank for 10 years. How much will be in the person's account after 10 years?
Evaluate the financial condition of corporation : How can an analyst use one of these financial measures to evaluate the financial condition of a corporation?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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