Question

A 15-year annuity of thirty $9,000 semiannual payments will begin 10 years from now, with the...

A 15-year annuity of thirty $9,000 semiannual payments will begin 10 years from now, with the first payment coming 10.5 years from now. Required : (a) If the discount rate is 12 percent compounded monthly, what is the value of this annuity 6 years from now? (b) What is the current value of the annuity?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Monthly effective rate = 12%/12 months = 1% per month compounded monthly.

We need a semi-annual effective rate, which is (1 + 0.01)^6 - 1 = 0.0615201506 - 1 = 6.15201506%

a)

This is the value of this annuity 6 years from now.

b)

This is the current value of the annuity.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A 15-year annuity of thirty $7,000 semiannual payments will begin 10 years from now, with the...
A 15-year annuity of thirty $7,000 semiannual payments will begin 10 years from now, with the first payment coming 10.5 years from now. a. If the discount rate is 11 percent compounded monthly, what is the value of this annuity 5 years from now? b. What is the current value of the annuity?
A 10-year annuity of twenty $4,000 semiannual payments will begin 9 years from now, with the...
A 10-year annuity of twenty $4,000 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. a. If the discount rate is 12 percent compounded monthly, what is the value of this annuity 5 years from now? b. What is the current value of the annuity?
A 10-year annuity of twenty $10,000 semiannual payments will begin 11 years from now, with the...
A 10-year annuity of twenty $10,000 semiannual payments will begin 11 years from now, with the first payment coming 11.5 years from now. a. If the discount rate is 9 percent compounded monthly, what is the value of this annuity 8 years from now? b. What is the current value of the annuity?
A 20-year annuity of forty $11,000 semiannual payments will begin 9 years from now, with the...
A 20-year annuity of forty $11,000 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. Required : (a) If the discount rate is 12 percent compounded monthly, what is the value of this annuity 4 years from now? (b) What is the current value of the annuity? rev: 09_17_2012
A four-year annuity of eight $5,000 semiannual payments will begin nine years from now, with the...
A four-year annuity of eight $5,000 semiannual payments will begin nine years from now, with the first payment coming 9.5 years from now. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) If the discount rate is 6 percent compounded monthly, what is the value of this annuity five years from now? Value of the annuity $ If the discount rate is 6 percent compounded monthly, what is the value...
A 5-year annuity of ten $4,000 semiannual payments will begin 8 years from now, with the...
A 5-year annuity of ten $4,000 semiannual payments will begin 8 years from now, with the first payment coming 8.5 years from now. If the discount rate is 10 percent compounded monthly, a) What is the value of this annuity five years from now? b) What is the value of this annuity four years from now? c) What is the value of this annuity three years from now? d) What is the current value of this annuity?
A 7-year annuity of fourteen $10,600 semiannual payments will begin 9 years from now, with the...
A 7-year annuity of fourteen $10,600 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. The discount rate is 9 percent compounded monthly. a. What is the value of this annuity five years from now? b. What is the value three years from now? c. What is the current value of annuity?
A 6-year annuity of twelve $11,800 semiannual payments will begin 9 years from now, with the...
A 6-year annuity of twelve $11,800 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.     If the discount rate is 12 percent compounded monthly, what is the value of this annuity five years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)       Value of the annuity $          If the discount rate is 12 percent compounded monthly, what is the value three...
A 4-year annuity with eight semiannual payments of $11,400 will begin 7 years from now, with...
A 4-year annuity with eight semiannual payments of $11,400 will begin 7 years from now, with the first payment coming 7.5 years from now. If the discount rate is 11 percent compounded monthly, what is the value of this annuity five years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value of the annuity $ If the discount rate is 11 percent compounded monthly, what is the value three years from...
A 5-year annuity of ten $7,800 semiannual payments will begin 9 years from now, with the...
A 5-year annuity of ten $7,800 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. The discount rate is 13 percent compounded monthly. a. What is the value of this annuity five years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value three years from now? (Do not round intermediate calculations and round your answer to 2 decimal places,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT