公司理财(英文版)Ch04.ppt

4-* Annuity: Example If you can afford a $400 monthly car payment, how much car can you afford if interest rates are 7% on 36-month loans? 0 1 $400 2 $400 3 $400 36 $400 4-* What is the present value of a four-year annuity of $100 per year that makes its first payment two years from today if the discount rate is 9%? ? 0 1 2 3 4 5 $100 $100 $100 $100 $323.97 $297.22 Problem 1 2 What is the present value of a four-year annuity of $100 per year that makes its first payment two years from today if the discount rate is 9%? Mr. Young has just won the state lottery, paying $50,000 a year for 20 years. He is to receive his first payment a year from now. The state advertises that as the Million Dollar (50,000X20=1,000,000) lottery. If the interest rate is 8 percent, what is the true value of the lottery? 490905 4-* Problem 3 Suppose you put $30,000 per year into your retirement fund. The account pays 6 percent per year. How much will you have when you retire in 30 years? 237174 4-* Problem 3 Danielle will receive a four year annuity of $500 per year, beginning at date 6. If the interest rate is 10 percent, what is the present value of her annuity? 984 4-* Problem 4 Ms Chen receives an annuity of $450, payable once every two years. The annuity stretches out over 20 years. The first pay occurs at date 2, that is, two years from today. The annual interest rate is 6 percent. What is the present value of annuity? 2505 4-* Problem 5 Harold and Helen Nash are saving for the college education for their newborn baby, Susan. The Nashes estimates that college expenses will run $ 30,000 per year when their daughter reaches college in 18 years. The annual interest rate over the next decades will be 14 percent. How much money must they deposit in the bank each year so that their baby will completely supported through four years of college? 1478 4-* 4-* Growing Annuity A growing stream of cash fl