Question

a) Consider a $762 CF at the beginning of 2042. The interest rate is 2.8%. What is the equivalent uniform amount for a series of end-of-year CFs spanning 2052-2056? (answer: $218.05)

b)Consider a $760 CF at the beginning of 2063. The interest rate is 3.9%. What is the equivalent uniform amount for a series of end-of-year CFs spanning 2050-2055? (answer: $87.88)

How do you work this out my hand to get the answer?

Answer #1

a.) Future Value of $762 at the beginning of the year 2052 = Present Value of annuity payment (2052-2056) at the beginning of the year 2052

- Future Value of $762;

Number of years = 10

Interest Rate = 2.8%

Using TVM equation;

FV = PV (1+r)^{n}

FV = 762(1.028)^{10} = $1004.3524

- PV of annuity = $1004.3524

Number of payments (n) = 5

Interest rate (r) = 2.8%

Let 'P' be the periodic payment

Then using PV of annuity formula

Solving for 'P', we get P = $218.05

b.) PV of $760 at the end of the year 2055 = FV of annuity payment (2050-2055) at the end of the year 2055

- PV of $760;

Number of Periods (n) = 7

Interest rate = 3.9%

Using TVM equation;

PV = FV/(1+r)^{n}

PV = 760/(1.039)^{7} = $581.4398

- FV of annuity = $581.4398

Number of payments (n) = 6

Interest Rate (r) = 3.9%

Let 'P' be the periodic payment.

Using FV of annuity formula;

Solving for 'P', we get P = $87.88

Consider a series of $110 end-of-period CFs spanning 2051-2056
and a $126 CF at the beginning of 2023. The interest rate is 2.1%.
What is the equivalent value of these CFs at the end of 2042?

Consider a series of end-of-period CFs spanning 2042-2056, which
increase at a 1.3% rate each period. The amount of the first CF in
the series is $124. The interest rate is 3.8%. What is the
equivalent uniform amount for a series of end-of-year CFs spanning
the same time period? (answer: $134.73)
How do you get this answer? Either by hand or excel

Consider a series of $125 end-of-period CFs spanning 2050-2056
and a $124 CF at the end of 2066. The interest rate is 2%. What is
the equivalent value of these CFs at the end of 2061?

. Consider a series of $71 end-of-period CFs spanning 2050-2055
and a $103 CF at the beg of 2066. The interest rate is 2.4%. What
is the equivalent value of these CFs at the beg of 2046? (answer:
$420.97
Please show all work

Consider a series of end-of-period CFs spanning 2042-2057, which
decrease at a 1% rate each period. The amount of the first CF in
the series is $143. The interest rate is 3.3%. What is the
equivalent value of this series at the beginning of 2042? (answer:
$1,641.26) Can you show either by hand or excel?

Consider a series of $115 end-of-period CFs spanning 2053-2057
and a $121 CF at the end of 2042. The interest rate is 1.5%. What
is the equivalent value of these CFs at the end of 2047? (answer:
$640.90)
Please show all work

Consider a series of end-of-period CFs spanning 2045-2056, which
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Consider a series of end-of-period CFs spanning 2046-2055, which
decrease by a fixed amount each period. The amount of the first CF
in the series is $71 and the decrement is $71. The interest rate is
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2055?

Consider two CFs:
a negative one at the beginning of Year 2022 in the amount of
$104 and
a negative one at the beginning of Year 2042 in the amount of
$129.
What would be the equivalent value of these CFs at the beginning
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The answer is -271.78
Please show all work

What single amount, at the end of the fourth year, is equivalent
to a uniform annual series of $5,000 per year for 10 years, if the
interest rate is 8% per year, compounded annually?

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