Question
A. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 25-year annuity is $1.9 million and the
A. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 25-year annuity is $1.9 million and the annuity earns a guaranteed annual return of 11 percent. The payments are to begin at the end of the current year. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Annual cash flows $________________
B. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 25-year annuity is $1.9 million and the annuity earns a guaranteed annual return of 11 percent. The payments are to begin at the end of seven years. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Annual cash flows $_______________ |
C. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $290,000 for 25 years? Assume that the annuity will earn 11 percent per year. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Present value $______________
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