Question

Jim Scott invested $5000 four times a year in an annuity due at New York Securities for a period of 4 years at an interest rate of 8%

compounded quarterly. Using the ordinary annuity table , calculate the total value of the annuity due at the end of the 4-year period.

Answer #1

TOPIC:Annuity due, total value of the investment.

Question 15 Jim Scott invested $5000 four
times a year in an annuity due at New York Securities for a period
of 4 years at an interest rate
of 8% compounded quarterly. Using the
ordinary annuity table , calculate the total value of the
annuity due at the end of the 4 -year period.
Ordinary annuity table: Compound sum of an annuity
of $1
Period
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
1
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000...

Find the amount at the end of two years and seven months if
P1000 is invested at 8% compounded quarterly using simple interest
for anytime less than a year interest period.

Mrs. Grey borrowed $5000 due in 18 months with interest at 6.50%
compounded quarterly. The lender agrees to have her pay $1500 in
four months, $1000 in one year and the balance in two years. If the
money is worth 5.00% compounded monthly, calculate the payment two
years from now that would liquidate Mrs. Greys debt.

Using Interest Factor Table
Ali invested $300,000 in a small project for an interest rate
of 8%. Four years later, he invested another $600,000 in the same
project but this time for an interest rate of 10%. What is the
total amount of money he is going to receive after 12 years of his
investment period?
Compressor that has the following costs are under consideration
for using in a new chemical plant. Using interest rate of 10% per
year. Calculate...

1.
Calculate the PV of an annuity due if the periodic cash flow =
$9,200, the time frame = 5 years and the annual interest rate = 8%.
2. Calculate the PV of an ordinary annuity if the periodic
cash flow = $11,000, the time frame = 4 years, and the annual
interest rate = 10%.
3. Mary intends to invest $15,000 each year for 6 years at an
expected interest rate of 7% per year. If Mary invests monthly,...

Question 3 (Total marks=7)
(a) Calculate the present value of an annuity due consisting of
three cash flows of
$1,000 each, each one year apart. Use a 6% compounded interest rate
per year.
(3.5 marks)
(b) Calculate the future value at the end of the third period of
an annuity due consisting
of three cash flows of $1,000 each, each one year apart. Use a 6%
compounded
interest rate per year.

Four plans for repayment of $5000 in five years with interest at
8%
1) At end of each year, pay $1000 principal plus interest due.
2) Pay interest due at end of each year and principal at end of
five years.
3) Pay in five equal end-of-year payments.
4) Pay principal and interest in one payment at end of five
years

1. In the following ordinary annuity, the interest is compounded
with each payment, and the payment is made at the end of the
compounding period.
Find the amount of time needed for the sinking fund to reach the
given accumulated amount. (Round your answer to two decimal
places.) $215 monthly at 5.8% to accumulate $25,000
Please provide number of years:
2. In the following ordinary annuity, the interest is compounded
with each payment, and the payment is made at the...

Present Value of an Annuity
Determine the present value of $140,000 to be received at the
end of each of four years, using an interest rate of 6%, compounded
annually, as follows:
a. By successive computations, using the present value of $1
table in Exhibit 5. Round to the nearest whole dollar.
First year$
Second Year
Third Year
Fourth Year
Total present value$
b. By using the present value of an annuity of $1 table in
Exhibit 7. Round to...

1.Your grandparents fund an annuity for you that will pay you
$5000 at the end of each of the 4 years of your college. If the
interest rate is 5% compounded annually, use the timeline
illustration of the present value of an annuity to determine how
much the grandparents must initially invest (present value) so you
can enjoy their gift.
2. A business needs to borrow $24,000 for a building project.
The manager of the business decides that he can...

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