Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask Linda_us Your Own Question

Linda_us, Finance, Accounts & Homework Tutor

Category: Homework

Satisfied Customers: 7291

Experience: Post Graduate Diploma in Management (MBA)

19873544

Type Your Homework Question Here...

Linda_us is online now

1. You are comparing two investments, both of which provide

Resolved Question:

can you show how it is that you got your answer?

1. You are comparing two investments, both of which provide annuity payments in exchange for a lump sum investment today. Each annuity is for a period of 25 years and each pays $500 a month. You require a 7 percent return on these investments. Annuity A pays at the beginning of each month and annuity B pays at the end of each month. Given this information, which one of the following statements is correct?

A. Both annuities are equally valuable today. B. Annuity B is worth more today because of the timing of its cash flows. C. Annuity A is worth more today because you will receive 25 payments whereas Annuity B only pays 24 payments. D. Annuity A has a higher present value and a lower future value than annuity B. E. Annuity A has both a higher present value and a higher future value than annuity B.

2. The Anderson Co. wants to borrow $5,000 at the beginning of each year for six years at 7 percent interest. The firm will repay this money in one lump sum at the end of year 6. How much of the firm's loan repayment is due to the $5,000 it received in year 4? A. $5,000.00 B. $5,724.50 C. $6,125.22 D. $6,553.98 E. $7,503.65

3. The condominium at the beach that you want to buy costs $249,500. You plan to make a cash down payment of 20 percent and finance the balance over 10 years at 6.75 percent. What will be the amount of your monthly mortgage payment? A. $2,291.89 B. $2,809.10 C. $3,287.46 D. $3,412.67 E. $4,145.68

4. Fred was persuaded to open a credit card account and now owes $5,150 on this card. Fred is not charging any additional purchases because he wants to get this debt paid in full. The card has an APR of 15.1 percent. How much longer will it take Fred to pay off this balance if he makes monthly payments of $70 rather than $85? A. 40.12 months B. 71.28 months C. 93.04 months D. 114.93 months E. 132.83 months

5. Sky Investments offers an annuity due with semi-annual payments for 10 years at 7 percent interest. The annuity costs $90,000 today. What is the amount of each annuity payment? A. $6,118.35 B. $6,332.50 C. $7,210.64 D. $7,939.59 E. $8,495.36

6. What is the present value of $1,200 received at the end of each year for eight years starting in year 4 and ending in year 11 if the discount rate is 10 percent? A. $3,975.08 B. $4,372.59 C. $4,809.85 D. $6,183.65 E. $6,401.91

7. Boyer & Son's just took out a 7.5 percent interest-only loan of $30,000 for ten years. Payments are to be made at the end of each year. What is the amount of the payment that will be due at the end of year ten? A. $22,500 B. $32,250 C. $45,750 D. $50,250 E. $64,500

The Clark Co. is borrowing $150,000 for six years at an APR of 9 percent. The principal is to be repaid in equal annual payments over the life of the loan with interest paid annually. Payments will be made at the end of each year. What is the total payment due for year 5 of this loan? A. $25,000 B. $29,500 C. $31,750 D. $34,000 E. $36,250

1. E is correct because the cash flows between two annuities are almost the same, the difference is only at very first payment and very lat payment. Annuity A pays 500 today, while annuity B pays 500 at the end of 25 year, so the present value and the future values of A is larger (since you would rather get 500 today than in 25 years.).

2. D is correct 5000, borrowed at the begining of year 4 will result in 5000*(1+0.07)^3 = 6125.22 , because they will be repaid in 3 years.

3. A is correct. you can use excel function =PMT(0.0675/12,120,199600). 199600 is your PV which is 80% of the initial cost.

4. D is correct. The problem should state $85 rather than $70 (you have the other way around. In this case he will pay in full in almost 115 months.

5. B is correct just use the annuitiformula for find A

The Present Value of an Annuity (PVA)

PVA = A *

1-

1 ---- (1 + i)^{n}

------

i

6. Correct answer is C, see the attached excell file

7. Correct answer is A. If it is interest only you pay just 7.5%*30,000=2,250 pear year, so in ten years it becomes 22,500.

8. The correct answer is 21,423, you do not have this choice please check again the problem, I'll be glad to help you.

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.

JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.

Web sites like justanswer.com/legal ...leave nothing to chance.

Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.

Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.

I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.Freshfield, Liverpool, UK

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.GPHesperia, CA

I couldn't be more satisfied! This is the site I will always come to when I need a second opinion.JustinKernersville, NC

Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. EstherWoodstock, NY

Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. RobinElkton, Maryland

He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here.DianeDallas, TX

Meet The Experts:

LogicPro

Engineer

Satisfied Customers:

4925

Expert in Java C++ C C# VB Javascript Design SQL HTML