RSS
 

Posts Tagged ‘period’

help deriving the following present value on an n period annuity immediate ?

20 Apr

E[ http://upload.wikimedia.org/math/8/d/f/8dfcea29072392b3f8042d15a753d727.png] = http://upload.wikimedia.org/math/8/d/f/8dfcea29072392b3f8042d15a753d727.png

i couldn’t write the symbols here so i had to use links t show you what i meant. for the left said the linked image should be everything except the i part that is there. so only the and n should be there. the right side is correct. please help me derive the formula if you’re not sure of anything just email me so i can clarify what i want help with.

 
1 Comment

Posted in Uncategorized

 

what is an annuity with payments made at the end of each period?

16 Apr
 
2 Comments

Posted in Uncategorized

 

Why does your auto insurance company insist that u pay at the beginning of each period?

28 Mar

What kind of annuity is this? Please explain – it’s for my corporate finance homework…
I need an answer that would satisfy a teacher, i realize that people want payment before they provide services, but in finance terms please!

 
4 Comments

Posted in Uncategorized

 

How can I calculate before-tax savings using Payback period, NPV nad IRR?

15 Mar

I have an assignment for the subject Corporate Finance and I can’t get out of it. The exercise goes like this…

A company has bought a new tractor which is $1,350,000 that has no salvage value. The estimated useful life is five years. The firm uses straight-line depreciation method. The company is subject to a 40% income tax rate. The present value of an annuity of $1 at 12% for 5 years is 3.60 and the present value of $1 at 12% in 5 years is 0.57.

There are three questions:
1. Compute the amount of before-tax savings that must be generated by the new tractor to have a payback period of no more than 3 years.

2. Compute the amount of before-tax savings that must be generated by the new tractor to have a NPV of at least $500,000 at a desired rate of return of 12%.

3. Compute the amount of before-tax savings that must be generated by the new tractor to have an IRR of 12%.

Please help me!!!! it would be much appreciated!

 
2 Comments

Posted in Uncategorized

 

How much would you have to invest at the end of each MONTH over a period of 30 years for a 2million dollars?

27 Feb

How much would you have to invest at the end of each MONTH over a period of 30 years to achieve a retirement of 2 million dollars? Assume that you can earn an annual rate of return of 10% on your investment.

Use the following formula in your calculation:

FUTURE VALUE OF ORDINARY ANNUITY = PAYMENT (COMPOUND INTEREST FACTOR)

 
4 Comments

Posted in Uncategorized

 

What typically happens to the insurance industry during a period of economic recession?

22 Feb

Are people more afraid and purchase more insurance or less? Does it make them delay purchasing insurance? Life and Health insurance specifically. More specifically senior medical supplement policies, advantage plans, life insurance, long term care insurance, and annuities. I’m asking for myself. Is it a good time economically in the U.S. today to sell these products? General or specific information will be helpful. Thank you for your experience and thoughts.

 
4 Comments

Posted in Uncategorized