Question

A perpetuity with payments of 1 at the end of each year has a present value of 40. A 10-year annuity pays X at the beginning of each year. Assuming the same effective interest rate, the present values of the perpetuity and the 10-year annuity are equal. Find X.

Answer #1

A perpetuity pays $390.26 at the start of each year.
The present value of this perpetuity at an annual effective
interest rate i is equal to the present
value of an annuity which pays 800 at the start of the first year,
790 at the start of the second year,
780 at the start of the third year and so on for 20 years. Find i
to 1 significant figure.

Perpetuity X has annual payments of 1,2,3,... at the end of each
year. Perpetuity Y has annual payments of q, q, 2q, 2q, 3q, 3q, ...
at the end of each year. The present value of X is equal to the
present value of Y at an annual effective interest rate of 10%.
Calculate q.
I'm new to perpetuities but basically understand how
perpetuities work. I also have a formula for perpetuities that
increase every year. I just can't figure...

Find the present value of an annuity in perpetuity that makes
payments of $70 at the end of year 6, year 12, year 18, year 24,
etc. and makes payments of $60 at the end of year 1, year 4, year
7, year 10, etc. and where effective annual interest is i =
7%.

Calculus is needed.
Perpetuity X has level payments of $220 at the end of
each year. Perpetuity Y also has end-of-year payments but
they begin at $11 and increase by $11 each year. Find the rate of
interest which will make the difference in present values between
these two perpetuities a maximum. (Round your answer to two decimal
places.)

The present value of perpetuity of $600 paid at the end of each
year plus the present value of a perpetuity of $800 paid at the end
of every 5 years is equal to the present value of an annuity of k
paid at the end of each year for 25 years. Interest is 6%
convertible quarterly. Calculate k. solution with details

the present value of a perpetuity of 6500 paid at the end of
each year plus the present value of a perpetuity of 8500 paid at
the end of every 5 years is equal to the present value of annuity
of k paid at the end of each year of 25 years. interest is 6%
convertible quarterly. calculate k. please show and explain
work

1. A perpetuity-due has monthly payments in this pattern: Q, 2Q,
3Q, Q, 2Q, 3Q, Q, 2Q, 3Q, . . . The present value of the perpetuity
is $700,000 and the effective annual discount rate is 6%. Find
Q.
2. A 30 year annuity-immediate has first payment $1200 and each
subsequent payment increases by 0.5%. The payments are monthly and
the annual effective rate is 8%. Find the accumulated value of the
annuity at the end of 30 years.
3....

Find the present value of an annuity due in perpetuity that pays
$75 at the beginning of each year for 20 years and increases by 4%
each year, starting at the beginning of the 21th year. Here assume
effective annual interest i = 7%.

The present values of the following three annuities are equal:
(i) perpetuity-immediate paying 1 each year, calculated at an
annual effective interest rate of 7.84%. (ii) 26-year
annuity-immediate paying 1 each year, calculated at an annual
effective interest rate of j%. (iii) n-year annuity-immediate
paying 1 each year, calculated at an annual effective interest rate
of (jā1)%. Calculate n.

Give the present value of a perpetuity that pays $1,000 at the
end of every year. The first payment occurs at the end of the fifth
year and the annual effective interest rate is 3%.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 13 minutes ago

asked 16 minutes ago

asked 21 minutes ago

asked 38 minutes ago

asked 52 minutes ago

asked 57 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago