Question

You will receive annual payments of $5,000 at the end of each year for 10 years, but the first payment will be received in year 3. What is the present value of these payments if the discount rate is 8 percent? $30,260.49 $26,633.40 $28,251.12 $24,387.13

Answer #1

**Step 1: Find the discounted value of cash flows at year
3:**

Here, we can use the present value of the annuity formula:

Where,

PVA = Present value of the annuity

A = Annuity or cash flow

i = Interest rate in decimal form

n = Number of years

**Step 2: Discount the above value to today's
value:**

Where,

PV = Present value

FV = Future value

You will receive annual payments of $5,000 at the end of each
year for 10 years, but the first payment will be received in year
3. What is the present value of these payments if the discount rate
is 6 percent?
$30,898.36
$24,387.13
$26,260.49
$28,251.12

You will receive annual payments of $5,000 at the end of each
year for 10 years, but the first payment will be received in year
3. What is the present value of these payments if the discount rate
is 6 percent?
$30,898.36
$24,387.13
$26,260.49
$28,251.12

John Smith will receive annual payments of $800 at the end of
each year for 12 years. The first payment will be received in year
4. What is the present value of these payments if the discount rate
is 7 percent?

You are scheduled to receive annual payments of $4,000 for each
of the next 8 years. The discount rate is 8 percent
What is the theoretical relation between the present value if
you receive these payments at the beginning of each year and the
present value if you receive these payments at the end of each
year? (Write the equation)

You are scheduled to receive annual payments of $21,400 for each
of the next 23 years. Your discount rate is 8 percent. What is the
difference in the present value if you receive these payments at
the beginning of each year rather than at the end of each year?

You will receive $5,000 a year in real terms for the next 5
years. Each payment will be received at the end of the period with
the first payment occurring one year from today. The relevant
nominal discount rate is 10.725 percent and the inflation rate is 3
percent. What are your winnings worth today in real dollars?

You are scheduled to receive annual payments of $9,400 for each
of the next 27 years. The discount rate is 7.0 percent. What is the
difference in the present value if you receive these payments at
the beginning of each year rather than at the end of each
year?
$9,400.00
$7,887.25
$8,288.63
$9,001.91
$10,058.00

You will receive $5,000 a year in real terms for the next 5
years. Each payment will be received at the end of the period with
the first payment occurring one year from today. The relevant
nominal discount rate is 9.725 percent and the inflation rate is
2.45 percent. What are your winnings worth today in real
dollars?

Assume you are to receive a 20-year annuity with annual payments
of $60. The first payment will be received at the end of Year 1,
and the last payment will be received at the end of Year 20. You
will invest each payment in an account that pays 10 percent. What
will be the value in your account at the end of Year 30?(FV twice)
$6,854.81 $7,427.83 $8,709.88 $9,427.83

Suppose that you will receive annual payments of $12,500 for a
period of 10 years. The first payment will be made 9 years from
now. If the interest rate is 6%, what is the present value of this
stream of payments? (Do not round intermediate calculations. Round
your answer to 2 decimal places.)

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