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Fantom [35]
3 years ago
11

Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years,

with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today
Business
1 answer:
Nataly_w [17]3 years ago
4 0

Answer:

The annuity will cost him $963,212.95.-

Explanation:

Giving the following information:

Cash flow= $75,000

Interest rate= 0.0525

n= 20

First, we need to calculate the final value. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}

A= annual cash flow

FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}

FV= 2,546,491.88 + 133,690.82= $2,680,182.70

Now, the present value:

PV= FV/(1+i)^n

PV= 2,680,182.70/(1.0525^20)

PV= $963,212.95

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the total salon services and products sold

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production inputs efficiency, these input could be labour, capital. Productivity helps to know how these inputs are been used in production of given level of output in economy.

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2 years ago
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5 0
3 years ago
Which of the following is a current asset?
Arturiano [62]

Answer:

D

Explanation:

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3 0
2 years ago
Question 9 of 10<br> 2 Points<br> A personal skill is ____
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3 0
3 years ago
A bond has yield to maturity of 7.15 percent; face value of $1,000; time to maturity of 11 years and pays coupons semiannually.
maxonik [38]

Answer:

6.34 %

Explanation:

For computing the coupon rate, first we have to determine the PMT by using the PMT formula that is shown on the attachment

Given that,  

Present value = $939.02

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The formula is shown below:

= PMT(Rate;NPER;-PV;FV;type)

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5 0
3 years ago
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