with clear explanation answer the following questions.,,,
Bank USA offers a stated annual interest rate of 4.65% compounded quarterly. What is the EAR?
You are to receive $75 per year indefinitely. The market rate of interest for these types of payments is 8%. The price you would pay for this stream is
A court settlement awarded an accident victim four payments of $50,000 to be paid at the end of each of the next four years. Using a discount rate of 4%, calculate the present value of the annuity.
Exercice 5: A small-scale businessman receives income at the end of each year from his business. He earns $1000 in the first year, $3000 in the second year, $5000 in the third and $7000 in the fourth year. The applied annual interest rate of 7%. Calculate the present value of the cash inflows today. $100 payable quarterly for 10 years at the annual rate of interest of 8% convertible quarterly. Also calculate its future value at the end of 10 years. Calculate the present value of an annuity-immediate of amount $100 payable quarterly for 10 years at the annual rate of interest of 8% convertible quarterly. Also calculate its future value at the end of 10 years. Calculate the present value of an annuity-immediate of amount $100 payable quarterly for 10 years at the annual rate of interest of 8% convertible quarterly. Also calculate its future value at the end of 10 years.Assuming an interest rate of 12% pa convertible monthly: (a) Calculate the combined present value of an immediate annuity payable monthly in arrears such that payments are E1,000 pa for the first 6 years and E400 pa for the next 4 years, together with a lump sum of E2,000 at the end of the 10 years [3 marks] (b) Calculate the amount of the level annuity payable continuously for 10 years having the same present value as the payments in (a).1. Your client has provided an investment which pays $25,000 in 2 years, $40,000 in 5 years and a further $80,000 in 8 years. The interest rate over the period of the investment is a nominal rate of 15% p.a., compounded monthly. If your client can buy the investment today for $60,000 would you recommend that this is a good investment? Why or why not? 2. Pontification Lid has a number of investment options however your client has limited these investments to only the following two options: The first investment costs $100,000 and pays the following cash flows in years 3 to 8: Yr 3: $25,000, Yr 4: $30,000, Yr 5: $20,000, Yr 6: $10,000, Yr 7: $50,000 and Yr 8: $80,000. The second investment option costs $250,000 and is a perpetuity which pays $25,000 a year with the 1" cash flow occurring at the end of year 3. Your client indicates that he requires a rate of return of 10% p.a which can be applied to both of these investments, Identify for him whether these investments are good (or not). 3. Two annuities are available for purchase that your client has identified The first annuity pays 57,000 each six-month period over a 5 year period, at a nominal rate of 9% p.a. The annuity has an annual fee of $300, paid at the beginning of each year. The second annuity pays $1,000 each month, again over 5 years at a nominal rate of 10% p.a. and does not have an annual fee If each of the annuities cost $50,000, identify which of the annuities you would recommend to your client
