Answer:
The answer is $3,888.22
Explanation:
This is an annuity due because the cash flow is being done on the first day of each period.
Annuity is a fixed sum of money paid to or receceived from someone or business every year.
Future Value(FV) = $30,000
Interest rate(i or I/Y) = 10%
Number of years(N)= 6 years
Annuity (PMT) = ?
Using a Financial calculator to solve it (Texa BA II Plus )
Annuity (equal contributions) will be $3,888.22
Answer:
B. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows.
C. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows.
Explanation:
A Perpetuity is a financial instrument that pays the holder forever or in perpetuity. For example, a bank paying you $800 per year for ever because you invested $40,000.
There are certain characteristics
Option B
The Perpetuity like most financial Securities has its value based on the underlying cashflows that it can accumulate. This means that it's value is based on the present value of it's future cashflow so the other the cash payments, the higher the present value.
Option C.
As the discounted cashflows in the nearer future will be discounted less by the discount rate as opposed to the cash flows further in future, the cashflows nearer to the present in time will contribute more to the Perpetuity than the cashflows further in time.
For example using that first example, $800 per year at a rate of 5% will be discounted to $762 in the first year but in year 10 will be discounted to $491.
Explanation:
See the images for answer....
I AM NOT FROM U.S.A I AM FROM INDIA
Answer:
$414,282.91
Explanation:
The issue price of the bonds is also known as the Present Value (PV) or current price of the Bonds and is calculated as :
FV = $440,000
PMT = ($440,000 x 9%) ÷ 2 = $19,800
P/yr = 2
N = 9 x 2 = 18
I/yr = 10%
PV = ?
Using a Financial calculator to input the values as above, the PV or issue price will be $414,282.91
They can lose their personal assets.
