# A 15-year annuity pays $1,300 per month, and payments are made at the end of each month. The interest rate is 10 percent compounded monthly for the first six years and 8 percent compounded monthly thereafter. What is the present value of the annuity ## Answers Answer 1 Answer: Answer: 162075.97 dollars. Explanation: The time period of annuity = 15 years Annuity amount =$1300 per month

The interest rate for the first six-year = 10%

Monthly interest rate = 10% / 12 = 0.83%

Thus number pf periods = 6 * 12 = 72

Interest rate for another 9 years = 8%

Monthly interest rate = 8% / 12 = 0.67%

Number of period = 8 * 12 = 96

Use the below formula to find the present value of the annuity.

## Related Questions

It is estimated that a certain piece of equipment can save ​$per year in labor and materials costs. The equipment has an expected life of years and no market value. If the company must earn a ​% annual return on such​ investments, how much could be justified now for the purchase of this piece of​ equipment? ### Answers Answer: The amount that could be justified now for the purchase of this piece of​ equipment is$73,747.41.

Explanation:

Note: This question is not complete as all the data in it are omitted. A complete question is therefore provided before answering the question as follows:

It is estimated that a certain piece of equipment can save $22,000 per year in labor and materials cost. The equipment has an expected life of five years and no market value. If the company must earn a 15% annual return on such investments, how much could be justified now for the purchase of this piece of equipment? The explanation to the answer is now given as follows: To calculate this, the formula for calculating the present value of an ordinary annuity is used as follows: PV = P * [{1 - [1 / (1 + r)]^n} / r] …………………………………. (1) Where; PV = Present value of the amount to justify the equipment purchase = ? P = yearly savings in labor and materials costs =$22,000

r = annual return rate = 15% = 0.15

n = Equipment has an expected life = 5

Substitute the values into equation (1) to have:

PV = $22,000 * [{1 - [1 / (1 + 0.15)]^5} / 0.15] PV =$22,000 * [{1 - [1 / 1.15]^5} / 0.15]

PV = $22,000 * [{1 - 0.869565217391304^5} / 0.15] PV =$22,000 * [{1 - 0.497176735298289} / 0.15]

PV = $22,000 * [0.502823264701711 / 0.15] PV =$22,000 * 3.35215509801141

PV = $73,747.41 Therefore, the amount that could be justified now for the purchase of this piece of​ equipment is$73,747.41.

### Final answer:

The question asks about the amount a company can justify spending on equipment, based on expected savings and a required rate of return. This requires understanding the concept of Present Value in financial calculations, using the formula PV = CF / (1 + r.

### Explanation:

The problem is related to the concept of Present Value in finance. Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return. In this scenario, the stream of cash flows is the annual savings in labor and materials costs due to the equipment. The return rate is the annual return the company requires on such investments.

To calculate the present value, use the formula:
PV = CF / (1 + r

Where:
PV is the Present Value
CF is the annual savings (Cash flow)
r is the annual return rate
n is the expected life of the equipment.

Plug in the given values into this formula to get the amount the company could justify for the purchase of this equipment. Do remember, the rate (r) is expressed in decimal, so if the annual return is say, 5%, use 0.05 in the formula.

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ndicate whether the following items are "Included in" or "Excluded from" gross income. a. During the year, that the taxpayer purchased stock as an investment which doubled in value. b. Amount an off-duty motorcycle police officer received for escorting a funeral procession. c. While his mother was in the hospital, the taxpayer sold some of her jewelry at a gain to help pay for the hospital bills. d. Child support payments received. e. A damage deposit the taxpayer recovered when he vacated the apartment he had rented. f. Interest received by the taxpayer on an investment in general purpose bonds issued by IBM. g. Amounts received by the taxpayer, a baseball "Hall of Famer," for autographing sports equipment (e.g., balls and gloves). h. Tips received by a bartender from patrons. (Taxpayer is paid a regular salary by the cocktail lounge that employs him.) i. Taxpayer sells his Super Bowl tickets for three times what he paid for them. j. Taxpayer receives a new BMW from his grandmother when he passes the CPA exam.

### Answers

Answer:

Gross income refers to the income of an individual before taxes or any other deductions. It includes all type of income from all sources.

The list is as follows:

a. Excluded from

b. Included in

c. Included in

d. Excluded from

e. Excluded from

f. Included in

g. Included in

h. Included in

i. Included in

j. Excluded from

A company's sales forecast would likely consider all of the following factors except: advertising and pricing policies. top management's attitude toward decentralized operating structures. general economic and industry trends. competition. political and legal events.

### Answers

Answer:

The correct answer is letter "B": top management's attitude toward decentralized operating structures.

Explanation:

A sales forecast is an estimate of the sales a company projects to process during a given period. This is done so that the firm can have an idea of the resources necessary to produce a determined amount of output from where the company can profit a margin that allows keep the business up and running satisfying stakeholders and employees' expectations.

While creating a sales forecast it is important to consider events that could affect the regular operations of the business such as government regulatory policy changes, competition, and the economy of the industry. Top executives' attitudes towards operating structures are irrelevant for such a purpose.

Answer:

top management's attitude toward decentralized operating structures.

Explanation:

The balance sheet of Indian River Electronics Corporation as of December 31, 2017, included 13% bonds having a face amount of $90.3 million. The bonds had been issued in 2010 and had a remaining discount of$3.3 million at December 31, 2017. On January 1, 2018, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102. Required: Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

### Answers

Answer:

Dr  Bonds payable                                      $90,300,000 Dr loss on early redemption of bonds$5,106,000

Cr Discounts on bonds payable                                             $3,300,000 Cr Cash$92,106,000

Explanation:

The amount of cash paid to bondholders by calling the bonds is the 102% of the face value of $90.3 million i.e$90.3*102%=$92,106,000 The proceeds would debited to cash while the face value of the bond of$90.3 million would be debited to bonds payable account.

In addition the remaining discount of \$3.3 million would credited to discounts on bonds payable account.

The loss or gain on the bond call can then be determined as appropriate.

in which order would the expectancy theory place the following events? a) outcome valence, performance, effort b) performance, effort, outcome valence c) effort, outcome valence, performance d) performance, outcome valence, effort e) effort, performance, outcome valence

### Answers

Answer: e. effort, performance, outcome valence

Explanation:

The expectancy theory analyses and explains the reason why people behave the way they do. The expectancy theory explains that individual behave the way they do because they believe their efforts which they put into a particular activity will bring about an outcome.

The first thing that comes first is the effort which one puts into an activity, after then is the performance and lastly the outcome.

If the signature line on a Patriot Act or customerID form has the escrow officer's name printed on
it on the signature line, however, you as the
signing agent are the one who fills out the ID
form, who should sign the Patriot Act form?

### Answers

Since i am the signing agent who fills out the ID form, then, i am at responsibility to sign the Patriot Act form as well.

### What is Patriot Act form?

The Patriot Act/customer ID form is a form that help the government to fight the funding of terrorism and money laundering activities.

The Patriot Act/customer ID form is necessitated by the Federal law and its requires all financial institutions to obtain, verify, and record information that identifies every customer.

However, if the signature line on the Patriot Act has escrow officer's name printed on it on the signature line and i am the signing agent who fills out the ID form, then, i am at responsibility to sign the Patriot Act form as well.

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### Final answer:

The person who fills out the Patriot Act or customer ID forms, in this case the Signing Agent, should be the one to sign the form, even if the escrow officer's name is printed on the signature line.

### Explanation:

In the context of processing Patriot Act or customer ID forms, the person who should be signing the form would typically be the individual who completed it, and can attest to the accuracy of the information therein. If you, as the Signing Agent, thoroughly completed the form, then you would sign it, even if the escrow officer's name is pre-printed on the signature line. The pre-printed name would likely indicate which the escrow officer is involved in the transaction, but it does not necessarily indicate who must sign the form. It's important too, however, to always follow your company's policies and any specific instructions given to you related to these forms.

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