User Account

All Pages

What is the present value of the payments

Assignment Help Finance Basics
Reference no: EM131728240

Question: Calculating Annuities Due. Suppose you are going to receive $13,500 per year for five years. The appropriate interest rate is 7.5 percent.

a. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an annuity due?

b. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? What if the payments are an annuity due?

c. Which has the higher present value, the ordinary annuity or annuity due? Which has the higher future value? Will this always be true?

Reference no: EM131728240

Questions Cloud

Compute the ear on the loan : EAR versus APR. You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2,950,000.
How much can you withdraw each year : Annuity Values. You are planning your retirement in 10 years. You currently have $75,000 in a bond account and $300,000 in a stock account.
Record the journal entries for the issuance of the bonds : On July 1, 2016 Alpha Company sells $1,000,000 face value of 10% five year bonds, Record the journal entries for the issuance of the bonds
Briefly determine the term apr : Calculating Annuities Due Interest Rates. You have arranged for a loan on your new car that will require the first payment today.
What is the present value of the payments : What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an annuity due?
What is ann percentage of stock ownership : What is Ann's percentage of stock ownership under the attribution rules for stock redemption
How much more is nancy cash flow worth : Annuity and Perpetuity Values. Mary is going to receive a 30-year annuity of $12,700. Nancy is going to receive a perpetuity of $12,700.
What is the current value of the annuity : Calculating Present Values. A 6-year annuity of twelve $7,750 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.
What were total current assets : Using the SEC 10-K for your company, answer the questions below: Walmart the company I chose. What were total current assets

Reviews

Write a Review

Finance Basics Questions & Answers

  Venture capital vc method valuation concepts

Fuji Electronics has examined other recent acquisitions in BioSystems' industry and believes that a 17 times price-earnings multiple would be appropriate for determining BioSystems value in the future.  Calculate the value of BioSystems as of the end..

  Use a financial calculator to solve for the interest rate

Use a financial calculator to solve for the interest rate involved in the following future value of an annuity due problem. The future value is $57,000, the annual payment is $7,500, and the time period is six years.

  Degree of operating leverage 10 times interest expense

output level 120000 unitsoperating assets 6000000.00operating asset turnover 12 turnsreturn on operating assets

  Explain the three different kinds of loan payment methods

describe the three different types of loan payment methods and discuss the advantages disadvantages and potential uses

  Strategic decision-making faster than previously

We've spent a lot of time this term on the issues of streamlining Finance operations and the CFO's evolving role in developing strategy.

  Normally acquiring firm pays price which is a premium above

1. at a firms quarterly dividend meeting held april 9 the directors declared a 0.50 per share cash dividend for the

  Benefits of international capital markets

What are some benefits of the international capital markets? does borrowing a portfolio of currencies offer any possible advantages over the borrowing of a single foreign currency?

  You notice that the risk-free rate is 8 and the market

you notice that the risk-free rate is 8 and the market expected return is 14. if the stock you are aiming at has a beta

  What is the annual total costs of cheese inventory

Cheeseburger and Taco Company purchases 19,761 boxes of cheese each year. What is the annual total costs of cheese inventory.

  What is the coupon rate

What is the coupon rate which must be paid for a newly-issued (on 1/1/10) two-year risk-free bond to sell at par?

  What are the total returns

What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does a bond selling at a discount or at a premium tell you about the relationship between rd and the bond's ..

  Differences between sectors and companies

Select a company from ASX and then need to answer the question given in this assignment according to the financial statements of that company so I chose MYER (MYR).

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd