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Please show how values in formulas are used to compute final answers: What is the relationship between the value of an annuity and the level
Please show how values in formulas are used to compute final answers:
What is the relationship between the value of an annuity and the level of interest rates? Suppose you just bought a 20-year annuity of $7,500 per year at the current interest rate of 10 percent per year. What happens to the value of your investment if interest rates suddenly drop to 5 percent? What if interest rates suddenly rise to 15 percent? # of years Annuity payment per year Interest rate Interest rate Interest rate 20 7,500 10% 5% 15% Complete the following analysis. Do not hard code values in your answers. All answers should be positive values. Value of investment at 10% Value of investment at 5% Value of investment at 15% You want to have $75,000 in your savings account 12 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit each year? $ 75,000 Desired amount # of years Interest rate 12 6.8% Complete the following analysis. Do not hard code values in your answers. Your answer should be a positive value. Annual depositStep by Step Solution
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