MATH 320 HW 7

# MATH 320 HW 7 - is 1 during the 1st year and increases by...

This preview shows page 1. Sign up to view the full content.

MATH 320 HOMEWORK 7 Due Wednesday, October 20 1. A thirty-year annuity-immediate makes annual payments. The first 10 payments are of amount 100. The payments then decrease by 5 each year until the 20th payment, which is of amount 50. The last 10 payments are also of amount 50. The interest rate is 6% per annum. Find the present value of the annuity. 2. A perpetuity-due makes annual payments. The first 5 payments are of amount 5, the next five are of amount 6, the next five are of amount 7, and so on. If the annual effective interest rate is 3.5%, find the present value of the perpetuity. 3. I borrow 100 at the interest rate i = 0 . 4 , which I am to repay in quarterly installments over the next 25 years. The quarterly payment
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: is 1 during the 1st year, and increases by amount X at the end oF each year. Determine X. 4. A twenty-year annuity-immediate with annual payments, has a present value oF 100. The frst payment is X , and the payment amount increases by 6.09% each year. IF i = 0 . 03 , fnd X. 5. Jane receives 10-year increasing annuity-immediate paying 100 the frst year and increasing by 100 each year thereaFter. Mary receives a 10-year decreasing annuity-immediate paying X the frst year and decreasing by X/ 10 each year thereaFter. at an eﬀective rate oF 5%, both annuities have the same present value. Calculate X. 1...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern