The present value of a dollar would be calculated as -
1 dollar X Present value factor of $ 1 @ 5 % for three years.
Present value factor of $ 1 @ 5 % for three years = 0.8638
Present value of $ 1 after 3 years = $ 1 X 0.8638 = $ 0.8638
Answer:
B. USD 2,500/-
Explanation:
She has evidently selected an annuity which will pay her USD 150,000 face value of the mentioned policy in addition to that also an amount of USD 25,000 in interest, both chunks in 10 increments, the interest is taxable.
Answer and Explanation:
Given:
Bond price = $10,000
Dividend rate = 7.9% per year
A. Computation of Dividend receive each 6 months :
Dividend rate for 6 month = 7.9% / 2 = 3.95% = 0.0395
Dividend receive each 6 months = Bond price × Dividend rate for 6 month
Dividend receive each 6 months = $10,000 × 0.0395
Dividend receive each 6 months = $395
B. Computation of amount receive at the end of ten years:
Amount receive at the end of ten years is equal to face value of bond
Amount receive at the end of ten years = $10,000
