What is the present value of the annuity

Assignment Help Financial Management

Reference no: EM13885353

A 10-year annuity pays $2,500 per month, and payments are made at the end of each month. The interest rate is 9 percent compounded monthly for the first four years, and 7 percent compounded monthly thereafter.

Required:

What is the present value of the annuity? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Present value $

Reference no: EM13885353

Questions Cloud

Cash flows for a capital project : Given the following cash flows for a capital project, calculate the IRR using a financial calculator year

Markets in order from most efficient to least efficient : Arrange the following markets in order from most efficient to least efficient

Treasury stock method of calculating diluted earnings share : Which statement would be most consistent with the Treasury Stock Method of calculating diluted earnings per share?

Government to manufacture missile retrieval system : Jenstar had secured a contract from the U.S. government to manufacture a missile retrieval system. The contract required that Jenstar provide a qualification report showing that the system was tested and met all the government specifications. Before..

What is the present value of the annuity : A 10-year annuity pays $2,500 per month, and payments are made at the end of each month. The interest rate is 9 percent compounded monthly for the first four years, and 7 percent compounded monthly thereafter. What is the present value of the annuity..

Company expects this equipment will lead to cash flows : Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $815,822, $863,275, $937,250, $1,020,110, $1,212,960, and $1,225,000 over the next six years. If the appropriate disco..

What is the internal rate of return on this project : Quick Sale Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000, $11,750,000, and $6,350,000 over the next three years. The company's cost of..

What is the term for this effect : Brian invested $1,000 five years ago and earns 4% interest per annum on his investment. By leaving the interest earnings in the account, he increases the amount of interest he earns each year. What is the term for this effect?

What is the interest rate per month for the loan : George bought a car for $26,500. He made a down-payment of $4,500 and financed the rest on a 5-year term with a monthly payment of $575. What is the interest rate per month for the loan? What is the nominal interest per year?

User Account

All Pages