(1) For a given series of payments, the lower the interest rate thethe Present V

Question

(1) For a given series of payments, the lower the interest rate thethe Present Value; the lower the interest rate the the Future Value. (4 points) (2) What is the goal of financial management? (4 points) You've entered into an investment agreement that requires you to make the following payments at the end of the following years: $5,000 at the end of year 1 $6,000, year 2, $7,000 year 3, $8,000 year 4 and $9,000 at year 5. The investment will earn 5.50%. How much total money will you have at the end of year 5? (Using a time line can be helpful in doing this problem). (8 points) (3) (4) Farmstate Insurance Company wants to sell you an annuity (a series of equa payments) that pays $543.56 per month for five years with the first payment starting next month. They have quoted the price of the annuity as $27,000. If your required rate of return is 11% peryear, should you pay Farmstate what they are asking? What is the value of this annuity to you? (4 points)

Explanation / Answer

There are too many questions and we are supposed to solve only 1 when multiple posted.

I am solving 3 here

1)higher and lower
2)The goal of financial management is to live a better life when we retire or having some goals in mind like paying for higher education or holiday trip and so how to save the money for them to reach the goal
3)Year 5 total
=(5000*(1+5%)^4)+(6000*(1+5%)^3)+(7000*(1+5%)^2)+(8000*(1+5%)^1)+(9000*(1+5%)^5)
=40627.32

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