# 9.4 Find the following values assuming a regular, or ordinary, an

9.4 Find the following values assuming a regular, or ordinary, annuity:                                   a The present value of \$400 per year for ten years at 10 percent                                                 = \$400 x 6.145                                                 = \$2,458.00   b The future value of \$400 per year for ten years at 10 percent                                                 = \$400 x 15.937                                                 = \$6,374.80   c The present value of \$200 per year for five years at 5 percent                                                 = \$200 x 4.329                                                 = \$865.80 d The future value of \$200 per year for five years at 5                                                 = \$200 x 5.526                                                 = \$1,105.20   9.6 Consider the following uneven cash flow stream:                   Year                                Cash Flow               PV Factor                    Present Value 0                                         \$0                         1                                        250                        0.909                           227.25                 2                                        400                        0.826                           330.40                 3                                        500                        0.751                           375.50                 4                                        600                        0.683                           409.80                 5                                        600                        0.621                           372.60                                                                                                 Total                                                       1,715.55                                                                                                                                                                 =======  a What is the present (Year 0) value if the opportunity cost (discount) rate is 10 percent?                                                                                  \$1,715.55    9.7 Consider another uneven cash flow stream:    9.7 Year Ca Year                                Cash Flow               PV Factor                    Present Value 0                                         \$2,000                  1.000                           2,000.00 1                                           2,000                  0.909                           1,818.00                 2                                                 0                   0.826                                  0.00                 3                                           1,500                  0.751                             1,126.50                 4                                           2,500                  0.683                           1,707.50                 5                                           4,000                  0.621                           2,484.00                                                                                                 Total                                                       9,136.00                                                                                                                                                                 ======= a. What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 10  percent?                                                                 \$9,136.00 b What is the value of the cash flow stream at the end of Year 5 if the cash flows are invested in an account that pays 10 percent annually   Year                                Cash Flow                           FV Factor                    Future Value 0                                         \$2,000                  1.611                           3,222.00 1                                           2,000                  1.464                           2,928.00                 2                                                 0                   1.331                                  0.00                 3                                           1,500                  1.210                             1,815.00                 4                                           2,500                  1.100                           2,750.00                 5                                           4,000                  1.000                          4,000.00                                                                                                 Total                                                       14,715.00                                                                                                                                                                 =======     9.9 Assume that you just won \$35 million in the Florida lottery, and hence the state will pay you 20 annual payments of \$1.75 million each beginning immediately. If the rate of return on securities of similar risk to the lottery earnings (e.g., the rate on 20-year U.S. Treasury bonds) is 6 percent, what is the present value of your winnings?               Present Value of Annuity of Annuity of \$1,750,000 for 20 years                                                             Immediate Payment                                                    \$ 1,750,000                         Annuity for 19 years at 6% (1,750,000 x 11.158)      \$19,526,500                                     Total                                                                \$21,276,500                                                                                                             =========

Pages
{{total || ""}}

Why Choose Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

## Essay Writing Services

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.