Question

Raggy's Inc. offers an annuity due with quarterly payments for 25 years at 8 percent interest. The annuity costs $200,000 today. What is the amount of each annuity payment?

Answer #1

Information provided:

Present value= $200,000

Time= 25 years*4= 100 quarters

Quarterly interest rate= 8%/ 4= 2%

This is solved using a financial calculator by inputting the below into the calculator:

The financial calculator is set in
the end mode. Annuity due is calculated by setting the
calculator to the beginning mode (BGN). To do this, press
2^{nd}BGN 2^{nd}SET on the Texas BA II Plus
calculator.

The amount of annuity payment is calculated by entering the below in a financial calculator in BGN mode:

PV= -200,000

N= 100

I/Y= 2

Press the CPT key and PMT to compute the amount of annuity payment.

The value obtained is 4,549.56.

Therefore, the amount of annuity
payment is **$4,549.56.**

An annuity pays $20,000 per quarter for 25 years and the
payments are made at the end of each quarter. The first payment is
made at the end of the first quarter. If the annual interest rate
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An ordinary annuity was purchased 5 years ago. The annuity pays
8% compounded quarterly. The quarterly payments have been $500.
What is the amount of interest earned on the annuity to date?

A six-year annuity of $10000 quarterly payments will begin 8
years from now. The discount rate is 9%, compounded quarterly. a.
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At an annual effective interest rate, i, where i > 0, a
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Determine i. (ALSO please draw any time diagrams that would be
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Determine the size of the two replacement payments if interest is
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A sequence of quarterly payments o P8,064 each, with the first
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Phil Dunphy wants to receive a 25-year annuity of $40,000 annual
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today (t=0) of this annuity.

When the interest rate is a constant 10% p.a., an annuity with
25 constant annual payments has a future value of $49,173.53 at the
last payment. What is the constant annual payment amount?
$450.38
$500.00
$1,000.00
$1,966.94
Cannot be determined, insufficient information

Annuity Due and Annuity calculation
a-Calculate the annual payment that can be received over 30
years from a single investment of $ 1000000 earning 9% compounded
annually.
b- Calculate monthly payment to be received over 15 years from a
single investment of $ 250000 earning 14.4% compounded monthly.
c- Calculate the payment to be received at the beginning of each
month for 15 years from an investment of $ 250000 earning 14.4%
compounded monthly.
d- Calculate the future value of...

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