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BigorU [14]
3 years ago
6

An ordinary annuity selling at $3,806.77 today promises to make equal payments at the end of each year for the next six years (N

). If the annuity’s appropriate interest rate (I) remains at 5.00% during this time, the annual annuity payment (PMT) will be .
Business
1 answer:
andrew-mc [135]3 years ago
5 0

Answer:

  • <em>The annual annuity payment (PMT) will be </em><u>$750.00</u>

Explanation:

The value of a <em>annuity payment</em>, A, is equal to the present value of the future payments.

When the interest rate,r, and the <em>annual annuity payment (PMT) </em>remain constant over the entire life of the annuity, the formula for the value of the annuity is:

      A=PMT\times \bigg[\dfrac{1}{r}-\dfrac{1}{r(1+r)^{t}}\bigg]

To caculate PMT substitute:

  • A = $3,806.77
  • r = 5.00% = 0.05
  • t = 6 years

      \$3,806.77=PMT\times \bigg[\dfrac{1}{0.05}-\dfrac{1}{0.05(1+0.05)^{6}}\bigg]

Compute and solve for PMT:

             \$3,806.77=PMT\times \bigg[20-14.9243079\bigg]\\\\\\PMT=\$3,806.77/5.07569207=\$750.00

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Answer:

Continuous manufacturing organisation

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This is so called because the materials inputted in the production process is in continuous motion as it moves through the production line.

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6 0
2 years ago
You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 29%. The T-bill rate is 8%. Your
Anastasy [175]

Answer:

13.85% and 18.9%

Explanation:

As in this exercise we have a free risk asset we will assume that the t-bill has a standard deviation of 0%, so let´s firts calculate the expected return:

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the calculation of standar deviation follows the same logic of the previous formula:

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Sigma(r)=18.9\%

4 0
3 years ago
Where do you pay a bill by credit card when the bill was not entered through the enter bills window?
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Which is not one of the financial costs of a recall? communication costs marketing costs legal costs engineering costs?
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3 years ago
the xyz company is a profit-maximizing firm with a monopoly in the production of pennants. the firm sells its pennants for $10 e
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Marginal cost

The additional expense brought on by increasing the quantity is known as the marginal cost. The additional expense at the margin.

Marginal revenue

The additional money that results from raising the quantity is known as the marginal revenue. The additional revenue at the margin.

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