MATH 320 HW 7

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

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

View Full Document Right Arrow Icon
MATH 320 HOMEWORK 7 Due Wednesday, October 20 1. A thirty-year annuity-immediate makes annual payments. The frst 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. ±ind the present value oF the annuity. 2. A perpetuity-due makes annual payments. The frst 5 payments are oF amount 5, the next fve are oF amount 6, the next fve are oF amount 7, and so on. IF the annual effective interest rate is 3.5%, fnd 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
Background image of page 1
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

This note was uploaded on 11/18/2010 for the course MATH 320 taught by Professor Dr.k during the Spring '10 term at Nevada.

Ask a homework question - tutors are online