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alisha [4.7K]
3 years ago
10

An ordinary annuity selling at $10,538.38 today promises to make equal payments at the end of each year for the next twelve year

s (N). If the annuity’s appropriate interest rate (I) remains at 6.50% during this time, the annual annuity payment (PMT) will be .
Business
1 answer:
klio [65]3 years ago
6 0

Answer:

The annual annuity payment during this time at the rate of 6.50 % is $1291.67

Explanation:

Compute the annual annuity payments (PMT)

Present Value of annuity (PV) = $10538.38

Number of years (n) = 12

Rate (i) = 6.50%

Present Value (PV) = PMT [1- (1+r)^{n} ]/r]

10538.38 = PMT [1- (1+0.0650)^{-12} ]/0.0650

Annual Annuity Payments = 0.0650*10538.38/[1- (1+0.0650)^{-12} ]

Annual Annuity Payments = $1291.67

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3 0
1 year ago
TJ's and Corner Grocery are all-equity firms. TJ's has 2,500 shares outstanding at a market price of $16.70 a share. Corner Groc
alexandr402 [8]

Answer:

$1.30

Explanation:

The valuation of TJ's = price per share * number of shares in issue

= $16.70 * 2,500 shares = $41,750.

Corner Grocery offer for TJ's of $45,000, and obviously a premium over the market value of TJ's at $41,750.

The price per share of Corner Grocery's offer = \frac{45,000}{2,500} = $18 per share.

That is, offer value divided by the number of shares to be acquired.

Therefore, merger premium per share = offer price, less market price

= $18 - $16.70.

= $1.30

8 0
3 years ago
Compute the yield to maturity of a $100 face value zero-coupon bond that matures in exactly one year and has a current market pr
Step2247 [10]

Answer:

Yield to maturity is 1.51%

Explanation:

Zero Coupon rate does not offer any coupon payment and it is issued at deep discount value.

Face value = F = $100

Price = P = $98.50

Year to mature = n = 1 year

Yield to maturity = ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = ( $100 - $98.5 ) / 1 ] / [ ( $100 + $98.5 ) / 2 ]

Yield to maturity = $1.5 / 99.25

Yield to maturity = 0.0151

Yield to maturity = 1.51%

5 0
3 years ago
Financial Statements, Closing Entries & Ratio Analysis
KATRIN_1 [288]

Answer: im not sure don't use my answer.

Explanation: CAHS CASH CASH

5 0
2 years ago
Read 2 more answers
Low unemployment rates are often: A. an indicator that finding a job is extremely difficult. B. associated with an ability to fi
lakkis [162]

Answer:

The correct answer is letter "B": associated with an ability to find a job with relative ease.

Explanation:

Unemployment is the state in which an individual who is able and willing to join the workforce cannot find a job even if that individual is constantly looking for opportunities.  

<em>High unemployment rates are typically seen during recessions while the unemployment of a country tends to be low during economic growth. In the last scenario, mainly private investment helps to find a job to be relatively easy.</em>

7 0
3 years ago
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