What is the present value of the annuity

Assignment Help Financial Management
Reference no: EM13810316

1. A 10-year annuity pays $2,150 per month, and payments are made at the end of each month. If the interest rate is 12 percent compounded monthly for the first five years, and 8 percent compounded monthly thereafter, what is the present value of the annuity?

2. You are planning to save for retirement over the next 30 years. To do this, you will invest $830 a month in a stock account and $430 a month in a bond account. The return of the stock account is expected to be 10.3 percent, and the bond account will pay 6.3 percent. When you retire, you will combine your money into an account with a 7.3 percent return.

How much can you withdraw each month from your account assuming a 25-year withdrawal period?

Reference no: EM13810316

Questions Cloud

Difference is between law and ethics : Give your opinions on what you think the difference is between law and ethics. Do not research this. this is your opinion
Difference between lean maintenance and lean production : How does lean maintenance differ from the traditional approach under which a maintenance department has the responsibility for all maintenance functions? Which level on the maintenance performance hierarchy would you expect to find a lean maintenance..
About blink book review : Blink Book Review
Address emotional and spiritual needs of patients : What does literature (journal articles, websites) say about spirituality and spiritual care, the history and use of it, does it work or not and what are other institutions implementing to address emotional and spiritual needs of patients?
What is the present value of the annuity : A 10-year annuity pays $2,150 per month, and payments are made at the end of each month. If the interest rate is 12 percent compounded monthly for the first five years, and 8 percent compounded monthly thereafter, what is the present value of the ann..
Mortgage to finance the purchase of a large tract of land : You have just arranged for a $1,580,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 5.8 percent, and it calls for monthly payments over the next 20 years. However, the loan has an eight-year balloon payment, ..
Analysis of an interview with someone : This assignment involves a written analysis of an interview with someone from a cultural group different from your own about their experience working for an organization.
What is the break-even rate of depreciation in try : Initial investment. The initial investment of USD 750,000 is used to purchase capital equipment. This equipment will be depreciated straight line to zero. At the end of five years, the remaining equipment will be sold for Turkish lira (TRY) 250,000. ..
Best practices for similar situations : Include several recommendations you would make to the manager to help solve the problem based on your research into documented best practices for similar situations. (You may make assumptions about the scenario in order to propose solutions - just..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Make in order to partake of future cybernetic goodness

You estimate that you will need $716 thousand in 30 years to buy some cybernetic body enhancements, including infrared vision, retractable claws, and expanded brain storage capacity. To achieve your financial goal, you want to make three equal-sized ..

  Define what is the current price of the bond

When it matures at the end of 7.5 years it pays out $1,000. If investors wish to earn 2.35% per year on this bond investment, what is the current price of the bond

  Outstanding bonds-what is the bonds price

Nungesser Corporation's outstanding bonds have a $1,000 par value, a 6% semi-annual coupon, 18 years to maturity, and an 7.5% YTM. What is the bond's price? Round your answer to the nearest cent.

  Interest to be repaid in four equal annual instalments

Betty borrows $50,000 at 10 percent annually compounded interest to be repaid in four equal annual instalments. What is the end of year loan payment she would make each year?

  Appropriate discount rate for the project

Lakonishok Equipment has an investment opportunity in Europe. The project costs €12 million and is expected to produce cash flows of €1.8 million in Year 1, €2.6 million in Year 2, and €3.5 million in Year 3.

  What is westons cost of equity capital

Weston Industries has a debt-equity ratio of 1.5. Its WACC is 9.2 percent, and its cost of debt is 6%. The Corporate tax rate is 35%. What is Weston’s cost of equity capital? What is Weston’s unlevered cost of equity capital?

  What must the expected return on this stock be

A stock has a beta of 1.25, the expected return on the market is 12 percent, and the risk-free rate is 2 percent. What must the expected return on this stock be?

  Part a1 give the role amp significance of or in business

part a1. give the role amp significance of o.r. in business amp industry for scientific decisions.2. the primary

  What is the real required rate of return for cirrus radio

Cirrus Radio is a multi-format, group radio station owner with operations in the top 100 US markets. The company is traded on the NASDAQ stock exchange. Donna Pringle has estimated the normalized FCFE for Cirrus Radio to be $5.25 per share for the ye..

  Next payment and payment at maturity

You purchase 2,500 bonds with a par value of $1,000 for $985 each. The bonds have a coupon rate of 7.7 percent paid semi-annually, and mature in 10 years. How much will you receive on the next coupon date?

  Kinstons capital structure weight of the preferred stock

Kinston sports supplies is considering an average risk project that will cost $300,000 at time zero and is expected to generate annual after tax cash inflows of 52,000 at the end of each of the next 10 years.  What is kinston's capital structure wei..

  Estimate average working capital required

Calculate with explanation the unit costs of the souvenirs and determine the price of the souvenirs and explain any other information that might be relevant for deciding the price

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd