What is the present value of your investment

Assignment Help Finance Basics
Reference no: EM13284129

What is the relationship between the value of an annuity and the level of interst rates? Suppose you just bought a 10-year annuity of $10,000 per year at the current interest rate of 3 percent per year.

a. What is the present value of your investment?
b. What is the present value of your investment if interst rates suddenly increased to 5 percent?
c. Why does a change in interst rates cause the value of your annuity to change?

 

Reference no: EM13284129

Questions Cloud

Calculate the charge density of the air : In fair weather, over flat ground, there may be a downward electric field of 155 N/C. Calculate the charge density of the air
Explain a volume of 300 ml please explain which : What would you need to use to prepare 300 ml of 0.500M K2Cr2O7 adding 30 ml of 1.50m K2Cr2O7 to 270 ml of H2O or dilute 250 ml of 0.600 m K2Cr2O7 to a volume of 300 ml please help explain which
What is the lifting force acting on the jet : a 600 ton Boeing business jet is flying at 500 mph at a constant altitude of 35,00 ft. what is the lifting force acting on the jet provided by the air
What is the total resistance force action on the jet : A 500 ton jet is flying at an altitude of 30,000ft with a constant speed of 520mph. what is the total resistance force action on the jet
What is the present value of your investment : What is the relationship between the value of an annuity and the level of interst rates? Suppose you just bought a 10-year annuity of $10,000 per year at the current interest rate of 3 percent per year.
What is the magnitude of the charge on each object : Two small objects are hung, from a point, on strings 50 cm long. they each have mass .06 grams and are given equal charge, What is the magnitude of the charge on each object
Explain what mass of h2c2o2 is required to prepare solution : What mass of H2C2O2 is required to prepare 250 mL of a 0.15 M H2C2O4 solution
What is the probability that you will run out of stock : Daily demand is distributed normally with mean = 250 and standard deviation =.50. At the end of each morning, any leftover copies are worthless and they go to a recycle bin.
What is the service rate : Using Sally's estimate of demand that follows, how many T-shirts should she produce for the upcoming event?

Reviews

Write a Review

Finance Basics Questions & Answers

  Find the cost of preferred stock

Ezzell Company issued preferred stock with a stated dividend of 10% of par. Preferred stock of this type currently yields 8 percent, and the par value is $100. Suppose dividends are paid annually.

  Explain decision making on implementing the new rate

Explain Decision making on implementing the new rate and Should the company implement the new rate

  How do the business cycles and the health of economy affect

How do the business cycles and the health of the economy affect the value of your labor? In terms of supply and demand, what are the optimal conditions in which to sell your labor? How might further education increase your mobility in the labor ma..

  What annual interest rate must they earn

Your parents are retiring in 18 years . they currently have 250,000 and they think they will need 1,000,000 at retirement. what annual interest rate must they earn to reach their goal, assuming they don't save any additional funds.

  Define financial risk

When we think "risk" in a financial sense, the meaning differs from the conventional definition. Describe what is meant by "risk" in the financial/investment realm.

  What is the most they can pay for a new house

Ben remembers from finance class that the shorter the amortization period, the less total interest you will pay. Calculate how much interest they would save if they made monthly payments over a 20 year amortization rather than a 25 year amortiza..

  How much value will be forgone

Kosovski Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable.

  Analysis of company working capital

Need help or steps to calculate Home Depot Accounts receivable and Accounts payable periods in M.S. excel spreadsheet for firm's last two years have no idea how to locate this info on 10-K .

  Objective type questions on stocks and risk analysis

Objective type questions on stocks and risk analysis and the measure of dispersion of a data set calculated from the square root of the value for variance

  Explain what is the required return

Explain what is the required return using the Fama-French three-factor model

  Evaluating the future value of the investment

Evaluating the future value of the investment and How much will Jayadev have at the end of 45 years

  What percentage of time are the pharmacists idle

The pharmacy of a large metropolitan hospital has a counter used exclusively for nurses' requests for medications. The time between requests is estimated to be about five minutes. A pharmacist can handle requests at a rate of 15 per hour. Suppose ..

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