Solved: Annual payment-ordinary annuity instead of a perpetuity, Finance Basics

+44 141 628 6080
[email protected]

Annual payment-ordinary annuity instead of a perpetuity

Problem:

You are willing to pay $15,625 to purchase a perpetuity which will pay you and your heirs $1,250 each year, forever. If your required rate of return does not change, how much would you be willing to pay if this were a 20-year, annual payment, ordinary annuity instead of a perpetuity?

Solution Preview :

Prepared by a verified Expert

Finance Basics: Annual payment-ordinary annuity instead of a perpetuity

Reference No:- TGS02035865

Now Priced at $20 (50% Discount)

Recommended (93%)

Rated (4.5/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Finance Basics

Q : Analyzing dell supply chain management system

Analyzing Dell's Supply Chain Management System Dell's supply chain strategy is legendary.

Q : Recommendation for an efficient-effective scm strategy

Increasing Information Galina's is a high-end auction house located in New York City.

Q : Constructing a loan amortization schedule

Construct a loan amortization schedule for a 3-year, 11 percent loan of $30,000. The loan requires three equal, end-of-year payments.

Q : Discuss about an inventory management strategy

Investing in Inventory Poppa's Toy Store Inc. has more then 150 stores in 38 states. The chain has been owned and operated for the last 30 years by CEO Taylor

Q : Annual payment-ordinary annuity instead of a perpetuity

How much would you be willing to pay if this were a 20-year, annual payment, ordinary annuity instead of a perpetuity?

Q : Finding the input impedance

Determine Ql and Qp at fp after a source conversion is performed.

Q : Abandonment value and opportunity cost

Explain how the $40,000 abandonment value can be viewed as the opportunity cost of keeping the project in one year.

Q : Component of success in supply chain management

Building Visibility Visionary companies are building extended enterprises to best compete in the new Internet economy.

Q : Create a report-summarizing scm systems

Increasing Revenues with SCM Cold Cream is one of the premier beauty supply stores in the metro New York area.

1933614

Questions
Asked

3,689

Active Tutors

1460173

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Asked Questions

Discuss patient with athsma about use of bronchodilators

You're instructing a patient with athsma about the use of bronchodilators. You should teach the patient which one?

Discuss new forms of advertising changing opdps work

How have social media and other new forms of advertising changing OPDP's work?

Observing and reporting a correctional clients behavior

Observing and reporting a correctional client's behavior is extremely important, to ensure they receive the right mental health care.

Discussion about improve patient satisfaction scores

You are trying to improve patient satisfaction scores in your hospital's emergency department. You decide to poll 40 patients a day for three weeks.

Problem concerning about the risk for stroke

Sam is concerned about his risk for his stroke since his dad died of stroke at age 57 based on the following information why would you recommend

Patient presented with acute-onset abdominal pain

You are on your 5th straight duty in the Urgent Care and you are seeing a 18 yo may who presented with acute-onset abdominal pain for 2 days.

Discuss - male with a history of moderate persistent asthma

A nurse is caring for an 8-year-old male with a history of moderate persistent asthma. He is accompanied by his mom and dad who reported