16. In exchange for $25,000 today I have been promised $12,585 per year for 5 years.Inflation has been averaging 8% per year. The inflation adjusted, or real IRR (io)is:

We'll proceed with these steps:Calculate the nominal IRR using the given cash…

Answered: 16. In exchange for $25,000 today I…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Suppose you are going to invest $11,000 per year for six years. The appropriate interest rate is 9 percent. What is the future value if the payments are made on the last day of the year? What if the payments are made on the first day of the year? a) $82,756.68; $90,204.78 b) $90,204.78; $82,756.68 c) $49,345.10; $53,786.16 d) $53,786.16; $49,345.10
You found out that now you are going to receive payments of $9,000 for the next 11 years. You will receive these payments at the beginning of each year. The annual interest rate will remain constant at 11%. What is the present value of these payments? Round your answer to the nearest whole dollar. a.)$83,704 b.)$49,602 c.)$55,859 d.)$62,003
Suppose that you have the opportunity to receive $24,000 per year for the next 6 years. Over this time period, the APR is 7% per year. Interest is compounded on a monthly basis. How much are you willing to pay for this investment today? Round your answer to the nearest dollar. a. PVA = $113,739 b. PVA = $118,309 c. PVA = $117,309 d. PVA = $118,903
You will receive a cash payment of $7072 in 7 years. If the relevant interest rate is 19.89%, how much is it worth today? Round to 2 decimal places. Include dollar signs ($) and percents (%) as appropriate.
You have $68,513 you want to invest. You are offered an investment plan that will pay you 4.58 percent per year for the first 20 years and 6.81 percent per year for the last 21 years. How much will you have (in $) at the end of the two periods? Answer to two decimals. < Previous
13. You will receive 15 annual payments of $20,000. The first payment will be received 8 years from today and the interest rate is 6 percent. What is the value of the payments today?
2. You are comparing two annuities which offer monthly payments of $1,000 for five years and pay 1.0 percent interest per month. Annuity A will pay you on the first of each month while annuity B will pay you on the last day of each month. Which one of the following statements is correct concerning these two annuities?A. Both annuities have the same future value as of ten years from today.B. Both annuities are of equal value today.C. Annuity B has a higher present value than annuity AD. Annuity B is an annuity due.E.Annuity A has a higher future value than annuity B.
You expect to receive 10 annual payments of $6,629, starting at the end of the year. How much are these payments worth today if the appropriate discount rate is 8.44 percent per annum? O $50,240.70 O $43,611.70 O $47,292.52 O $40,663.52 O $46,559.87
Find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 7% per year. I need to know the value of G.
7. What is the present value of a perpetuity of annual payments where the first payment is in one year and each payment is $4599.99? assume that time zero is now and the effective interest rate per year is 14%.
Need help with finance homework. 2. For the next 7 years, you expect to receive equal payments at the beginning of each year. Today, you receive the first payment. The present value of these payments is $7,000. If the appropriate discount rate is 6.5%, what is the annual payment amount?
18. Suppose that you will receive annual payments of $10,000 for a period of 10 years. The first payment will be made four years from now. If the interest rate is 6%, what is the present value of this stream of payments? (Round your answer to the nearest cent.)

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16. In exchange for $25,000 today I have been promised $12,585 per year for 5 years. Inflation has been averaging 8% per year. The inflation adjusted, or real IRR (io) is: