Calculate the annual cash flows (annuity payments) from a fixed-payment annuity

Question

Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of the current year. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)

Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of five years. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 12 percent per year. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.1 million and the annuity earns a guaranteed annual return of 12 percent. The payments are to begin at the end of the current year. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)

Explanation / Answer

a Annual cash flows $      147,266.66 PMT(12%,20,-1100000) b Annual cash flows $      231,726.94 PMT(12%,20,-1100000*(1+12%)^4) c Present value $ 1,493,888.72 PV(12%,20,-200000)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.