Suppose you just bought a 15-year annuity of $7,100 per year at the current inte

Question

Suppose you just bought a 15-year annuity of $7,100 per year at the current interest rate of 11 percent per year.

What is the value of your annuity today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

What is the present value if interest rates suddenly drop to 6 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

What is the present value if interest rates suddenly rise to 16 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

Explanation / Answer

What is the value of your annuity today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

hat is the present value if interest rates suddenly drop to 6 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

What is the present value if interest rates suddenly rise to 16 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

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