29,37,38 please

payments come at the beginning of each period? The interest rate is 12 perc 84 Aur The Capital Maning Pro Likewise, the formula for the future value of an annuity due requires a modification: FV0 = AX (a +37***-1-1) 28 What is the future value of a 15-year annuity of S1.800 per period where What is the present value of a 10-year annuity of 53.000 per period in which payments come at the beginning of each period? The interest rate is 12 percent 1 (1 +)*- i PVAD = AX ure Advanced Problems 29. Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now: $2,200 a year for nine years, or $31,000 at the end of nine years. Assuming you could earn 10 percent annually, which alternative should you choose? If you could earn 11 percent annually, would you still choose the same alternative? uired 30. You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the cer tificate of deposit, you make an initial investment at the beginning of the first year What single payment could be made at the beginning of the first year to achieve this objective? b. What amount could you pay at the end of each year annually for 10 years to achieve this same objective? 31. Beverly Hills started a paper route on January 1. Every three months, she deposits $550 in her bank account, which earns 8 percent annually but is compounded quarterly. Four years later, she used the entire balance in her bank account to invest in an investment at 7 percent annually. How much will she have after three more years? 32. Franklin Templeton has just invested $9,260 for his son (age one). This money will be used for his son's education 18 years from now. He calculates that he will need $71,231 by the time the boy goes to school. What rate of return will Mr. Templeton need in order to achieve this goal? 33. Mr. Dow bought 100 shares of stock at $14 per share. Three years later, he sold the stock for $20 per share. What is his annual rate of return? 34. C. D. Rom has just given an insurance company S35,000. In return, he will receive an annuity of $3,700 for 20 years. At what rate of return must the insurance company invest this $35,000 in order to make the annual payments? 35. Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of $180,000, and her life expectancy for the next five years: $1.000 $2.000.$3.000, $4,000, and 55.000. She will return on her assets. What will be her yearly for the next 15 years is 15 more years. Her pension fund be can earn a percent 36. Morgan Jennings, a geography professores S500 in a parcel of land that is expected to increase in value by 12 percen per year for the next five years. He will take the proceeds and provide himself with a 10-year Assuming a 12 percent interest rate, how much will this wity be? 37 You wish to retire in 14 years, at which time you want to have med enough money to receive an annual annuity of $17.000 for 19 years after while after retirement you can earn 10 percent on your money retirement. During the period before retirement you can earn 8 percentually. (L09-4) What annual contributions to the retirement fund will allow you to receive 38 Del Monty will receive the following payments at the end of the next three years: $2,000, $3.500, and $4.500. Then from the end of the 4th year through the end of the 10th year, he will receive an annuity of 55.000 per year. Ata discount rate of 9 percent, what is the present value of all three future benefits? 39. Bridget Jones has a contract in which she will receive the following payments the $17,000 annuity? LOS 4) Deferred (LO9-3) Preta (L09-3) Deferred (L09-3) then receive an annuity of $8.500 a year from the end of the 6th through the end of the 15th year. The appropriate discount rate is 14 percent. If she is offered $30,000 to cancel the contract, should she do it? 40. Mark Ventura has just purchased an annuity to begin payment two years from today. The annuity is for $8,000 per year and is designed to last 10 years. If the interest rate for this problem calculation is 13 percent, what is the most he should have paid for the annuity? 41. If you borrow $9,441 and are required to pay back the loan in five equal annual installments of $2,750, what is the interest rate associated with the loan? 42. Cal Lury owes $10,000 now. A lender will carry the debt for five more years at 10 percent interest. That is, in this particular case, the amount owed will go up by 10 percent per year for five years. The lender then will require that Cal pay off the loan over the next 12 years at 11 percent interest. What will his annual payment be? 43. If your uncle borrows $60,000 from the bank at 10 percent interest over the seven-year life of the loan, what equal annual payments must be made to discharge the loan, plus pay the bank its required rate of interest (round to the nearest dollar)? How much of his first payment will be applied to interest? to principal? How much of his second payment will be applied to each? 44. Larry Davis borrows $80,000 at 14 percent interest toward the purchase of a home. His mortgage is for 25 years. Yield (L09- Loan (L09 Loa (LO Lo (L 4. How much will his annual payments be? (Although home payments are usually on a monthly basis, we shall do our analysis on an annual basis for ease of computation. We will get a reasonably accurate answer.) b. How much interest will he pay over the life of the loan? c. How much should he be willing to pay to get out of a 14 percent mortgage and into a 10 percent mortgage with 25 years remaining on the mortgage