An investor deposits 1000 pesos per year in a bank which offers an interest of 18% per annum for time deposits of over 5 years. Compute how much the investor can collect at the end of 13 years, assuming that he never withdraws any amount before the 13th year.
I really need help. I don’t need instant answer. I only need to know what are this and that and how to solve it. Thank you so much in advance!
Sharb Digit Pty Ltd wishes to accumulate funds to provide a retirement annuity for its Director of Marketing, Penny Peters. Penny, by contract, will retire at the end of exactly 10 years. On retirement, she is entitled to receive an annual end-of-year payment of $35,000 for exactly 20 years. If she dies prior to the end of the 20-year period, the annual payments will pass to her heirs. During the 10-year ‘accumulation period’, Sharb Digit wishes to fund the annuity by making equal annual end-of-year deposits into an account earning 8% p.a. interest. Once the 20-year ‘distribution period’ begins, Sharb Digit plans to move the accumulated monies into an account earning a guaranteed 10% p.a. At the end of the distribution period the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and the first distribution payment will be received at the end of year 11.
1.Draw a time-line depicting all the cash flows associated with the above accumulation and distribution periods.
2.How large a sum must Sharb Digit accumulate by the end of the year 10 to provide the 20-year, $35,000 annuity?
3. How large must Sharb’s equal annual end-of-year deposits into the account be over the 10-year accumulation period to fund Penny’s retirement annuity fully?
find the future value of annuity due. how much contributions and how much from interest
1. $250 deposit at beginning of each year quarter 12yrs at 4.2%
quarterly
2. 1500 deposited beginning of each semi annual per 11yrs at 5.6% compounded semi annually
This is the maths question -
“Ashlin wants to have $6000 in 4 years time. How much would he need to deposit annually into an annuity that pays 5.9% pa* interest?”
* – pa = Per Annum.
What formula do I need to use to solve this problem?
Is it the future value annunity or the present value annuity?
Thanks for the help =)
Your father is about to retire, and he wants to buy an annuity that will provide him with $50,000 of income per year for 20 years, beginning a year from today. The going rate on such annuities is 6%. How much would it cost him to buy such an annuity today?
$488,349.15
$416,110.34
$517,513.68
$615,976.84
$573,496.06
find the future value of annuity due. how much from contributions and how much from interest
$750 deposited at beginning of the month for 15yrs at 5.9% compounded monthly
how do i solve?
1. A firm has paid out Rs. 150,000 as dividends from its net income of Rs. 250,000. What is the retention ratio for the firm?
a. 12 %
b. 25 %
c. 40 %
d. 60 %
2. ROE = ____________________
a. ROA x Equity Multiplier
b. ROA x ( 1 + Debt Equity Ratio)
c. Profit Margin x Total Assets Turnover x Equity Multiplier
d. All of the given options
3. Which of the following is NOT an external use of financial statements information?
a. Evaluation of credit standing of new customer
b. Evaluation of financial worth of supplier
c. Evaluation of potential strength of the competitor
d. Evaluation of performance through profit margin and return on equity
4.If you plan to save Rs. 10,000 with a bank at an interest rate of 8%, what will be the worth of your amount after 4 years if bank offers simple interest?
a. Rs. 3,200
b. Rs. 10,084
c. Rs. 13,200
d. Rs. 15,240
5.Which of the following process can be defined as the process of generating earnings from previous earnings?
a. Discounting
b. Compounding
c. Factorization
d. None of the given options
6. Both future value and present value of a sum of money are based on:
a. Interest rate only
b. Number of time periods only
c. Both interest rate and number of time periods
d. Neither interest rate nor number of time periods
7. Which of the following is CORRECT regarding the present value discount factor?
a. It is greater than 1.0
b. It is equal to zero when discount rate is zero
c. It increases as the time period increases
d. It decreases as the discount rate increases
8. In how many years, an amount will be doubled at a discount rate of 8 percent?
a. 3 years
b. 6 years
c. 9 years
d. Cannot be determined without more information
9.What is the present value of the following end‐of‐year cash flows if the discount rate is 7 percent? Years 1 2 3 Cash Flow (Rs.) 600 950 1,200
a. Rs. 1,998
b. Rs. 2,004
c. Rs. 2,171
d. Rs. 2,371
10. In which of the following type of annuity, cash flows occur at the beginning of each period?
a. Ordinary annuity
b. Annuity due
c. Perpetuity
d. None of the given options
Use the Annuity Formula to determine how many years it will take to accumulate $100,000 if you deposit $100 each month into an account earning 9% compounded monthly?
R is the rate of interest and n is the number of years. The n is an exponential value of 1+r. It can also be written as (r^-1)(1-(1+r)^n).
As written the formula for the Present value of annuity of $1 in Arrears; (1/r)(1-(1/(1+r)^n)). For each dollar invested per n years, the principal will grow by the ammount given. I am trying to solve for r. So it could be A=(P)(1/r)(1-(1/(1+r)^n)) where A is the Amount (or total), P is the Principal, r is the rate, and n is the number of years.
NOminal interest and Effective rate is different…right?
I have this problem on solving annuity that states only the nominal interest. Here is how it states..
A building and loan association requires that loans be repaid b uniform monthly payments which include monthly interest calculated on the basis of nominal interest of 5.4% per annum. If 5000 pesos is borrowed to be repaid in 10 years, what must the monthly payment be?
It’s the “Future Value of an Ordinary Annuity” formula, but solving for the rate…
Here’s a picture of the equation:
http://i36.tinypic.com/99j2qe.png
I tried solving for r the best I could, even my math professor can’t figure it out… I’m hoping someone can help me, I’ll give 10 points to the the person that can best explain step-by-step how to tackle this thing.
I asked this question before, and I got an answer “just replace r/12 with x”. I tried working my way though with that too, but I can’t get rid of the exponent or anything… I just can’t figure this out!
Could someone good at mathematics please work though the problem and explain how to solve this?
You have a six-year long annuity that pays you $100 every year
for six-years without any risk. Presently it costs $410. Given this information, what is the price of the six-year zero-coupon bond?
I know it may be alittle long..but please help me, I really appreciate it! Thanks to all the kind people on Yahoo Answers!
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——————————————————————————–
Q1) Why do most winners select the cash option plan when given a choice?
Q2) If Michigan Lottery would like to give the annuity option an equal chance of being selected, how would it have to structure its payments?
The present value of an annuity table
has interest rate on one axis
and has number of periods on the other axis.
A year ago during my finance classes, I came accross a way to compute the value of “interests rate missing on the table” that are “between consecutive incremental interest rates”
For example, if the increments are 1/10th of a percent, then I used to know a way to solve increments which were “in between”.
I remember like if the PVA table jumps from 5 to 5.5 to 6 to 6.5 etc…
I used to know a way to solve for 6.3 by logarithms.
I will look it up tonite, but want to ask on here, to see if anyone else knows how to do it (I found that in my prestigious public university’s finance 4000 level classes, that my classmates were inept at math)
My formula was something like “ln 6 minus ln 5″ or I would take the ln of the difference.
I take adderall for ADD and it affects my limbic reward response system, so I ask questions on yahoo answers which it tells me