Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her a fixed annual income. The annuities are as follows: Duration of the Annuity (Years) Annuity Purchase Price of the Annuity (At t = 0) $50,000 $30,000 $50,000 UD Amount of Money Received Per Year $9,000 $6,000 $7,500 15 16 18 Nicki could earn 12 percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above, if any, will earn Nicki a higher return than investing in the savings account earning 12 percent? a. If Nicki could earn 12 percent on her money, what is the present value of annuity A with $9,000 payments per year and 15 years duration? $ (Round to the nearest cent.) If Nicki could earn 12 percent on her money by placing it in a savings account, should she place it instead in annuity A? (Select the best choice below.) A Yes Nicki should place her money in annuity A because the present value of the annuity is areater than the initial payment Click to select your answer(s). . Annuity Duration of the Annuity (Years) Purchase Price of the Annuity (At t = 0) $50,000 $30,000 $50,000 Amount of Money Received Per Year $9,000 $6,000 $7,500 15 16 18 Nicki could earn 12 percent on her money by placing it in a savings account. Alternatively, she could place it in any of the above annuities. Which annuities in the table above, if any, will earn Nicki a higher return than investing in the savings account earning 12 percent? O A. Yes. Nicki should place her money in annuity A because the present value of the annuity is greater than the initial payment. O B. No. Nicki should not place her money in annuity A because the present value of the annuity is smaller than the initial payment. b. If Nicki could earn 12 percent on her money, what is the present value of annuity B with $6,000 payments per year and 16 years duration? $ (Round to the nearest cent.) Click to select your answer(s). O A. Yes. Nicki should place her money in annuity B because the present value of the annuity is greater than the initial payment. B. No. Nicki should not place her money in annuity B because the present value of the annuity is smaller than the initial payment. C. If Nicki could earn 12 percent on her money, what is the present value of annuity C with $7,500 payments per year and 18 years duration? $ (Round to the nearest cent.) Click to select your answer(s). If Nicki could earn 12 percent on her money by placing it in a savings account, should she place it instead in annuity C? (Select the best choice below.)
A. Yes. Nicki should place her money in annuity C because the present value of the annuity is greater than the initial payment.
B. No. Nicki should not place her money in annuity C because the present value of the annuity is smaller than the initial payment. Click to select your answer(s).
Answers: 1
Another question on Business
Business, 21.06.2019 18:30
Shareholders of tesla recently expressed concerns that elon musk should give up some of his power on tesla's board by appointing two independent directors. which of the following is not a reason why elon musk is perceived to have significant power over tesla's board? 1. he is the founder of the firm and a successful entrepreneur, thus board members may be hesitant to challenge him.2. as the ceo and chairman of the firm he can easily determine what the board should discuss and how it should vote on strategic issues.3. all board members, except for kimbal, have been appointed to the board during elon's tenure.4. many of the firm's directors are outsider investment managers whose interests would not be aligned with those of firms' shareholders.
Answers: 3
Business, 22.06.2019 13:40
Computing equivalent units is especially important for: (a) goods that take a relatively short time to produce, such as plastic bottles. (b) goods with sustainability implications in their production processes. (c) goods that are started and completed during the same period. (d) goods that take a long time to produce, such as airplanes.
Answers: 2
Business, 23.06.2019 06:50
Jaden has a degree in marketing. she would like to run her department. she is going back to school to get a degree in: a. web designer b. database administrator c. information security d. computer user support
Answers: 1
Business, 23.06.2019 13:30
During a meeting, tammy, a branch manager for usa bank, pointed to the corporate organization chart on the wall. tammy remarked that "these people provide advice, recommendations, and research for us, and they are indicated with a dotted line. laura (our ceo) and the vice presidents of our organization are up here, indicated on the organization chart by a solid line vertical line." are indicated on the organization chart by a solid line and are indicated by a dotted line. a. line managers; temporary personnel b. line managers; personnel in training c. staff personnel; vital personnel d. line managers; part-time personnel e. line managers; staff personnel
Answers: 2
You know the right answer?
Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent w...
Questions
Mathematics, 17.10.2019 00:10
Mathematics, 17.10.2019 00:10
Social Studies, 17.10.2019 00:10
Mathematics, 17.10.2019 00:10
Mathematics, 17.10.2019 00:10
Mathematics, 17.10.2019 00:10
History, 17.10.2019 00:10
Chemistry, 17.10.2019 00:10
