(PLEASE SHOW ALL WORK AND VALUES) (PLEASE SHOW ALL WORK AND VALUES) 24)Fill in t
ID: 2812157 • Letter: #
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(PLEASE SHOW ALL WORK AND VALUES)
(PLEASE SHOW ALL WORK AND VALUES)
24)Fill in the missing annuity in the following table for an ordinary annuity stream. Number of Payments or Years Annual Interest Future Annuity Rate 9% 8% 7% 4% Value S25,000.00 S96,048.86 Present Value S25,000.00 S200,000.00 20 30 10 25) County Ranch Insurance Company wants to offer a guaranteed annuity in units of S500, payable at the end of each year for twenty-five years. The company has a strong investment record and can consistently earn 7% on its investments after taxes. If the company wants to make 1% on this contract, what price should it set on it? Use 6% as the discount rate. Assume it is an ordinary annuity and the price is the same as present value. 26) A smooth used-car salesman who smiles considerably is offering you a great deal on a "preowned" car. He says, "For only six annual payments of $2,500, this beautiful 2008 Honda Civic can be yours." If you can borrow money at 8%, what is the price of this car?Explanation / Answer
24)
for annuity payment use formula as in excel=PMT(rate,nper,pv,fv)
a) annuity payment=PMT(9%,5,-25000,0)=6427.31
b) annuity payment=PMT(8%,20,0,-25000)=546.31
c) annuity payment=PMT(7%,30,-200000,0)=16117.28
d) annuity payment=PMT(4%,10,0,-96048.86)=8000.00
the above is answer..
we do only one question based on Chegg rule
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