math

Young and Company owes bond holders $5,500 interest at the end of each quarter for the next five years. How much must they deposit now at 8% interest compounded quarterly to yield an annuity
payment of $5,500?

  1. 👍 0
  2. 👎 0
  3. 👁 205
  1. You want the present value of 20 payments of 5500 at the end of each quarter for 5 years

    i = .08/4 = .02
    n = 4(5) = 20

    PV = 5500( 1 - 1.02^-20)/.02
    = $89932.88

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. Math

    The Garraty company has two bond issues outstanding. Both bonds pa $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years and Bond S a maturity of 1 year. A). What will be the value of each of these bonds

  2. math

    Mr. X invested a part of his investment in 10% bond A and a part in 15% bond B. His interest income during the first year is Rs.4,000. If he invests 20% more in10% bond A and 10 % more in 15% bond B, his income during the second

  3. Managerial accounting

    The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 12,000 14,000

  4. math

    Suppose you put $2000 in a savings account at an APR of 8% compounded quarterly. Fill in the table below. (Calculate the interest and compound it each quarter rather than using the compound interest formula. Round your answers to

  1. Mathematics and investment

    1. Angelo wants to renovate his house in 3 years. He estimates the cost 300,000. How much must Angelo invest now at 8% compounded quarterly in order to have 300,000 3 years from now. 2. Angelo Ancis want to save 500,000 in 5.5

  2. Accounting

    Nafari Company's sales budget has the following unit sales projection for each quarter of the calendar year 2011. January -March 1,080,000 April-June 1,360,000 July-September 980,000 October-December 1,100,000 Total 4,520,000

  3. math

    Jungle Jim owes three debts: $500 due in one year plus interest at 6% compounded semi-annually, $2000 due in two years, $1000 due in three years plus interest at 5% compounded monthly. He wishes to discharge these debts by paying

  4. Math

    an individual has purchased 275000 worth of savings certificates. Certificates expires in 25 years and a simple interest rate is computed quarterly at 3%per quarter. Interest checques are mailed to certificates holders ever 3

  1. Accounting

    Zeke Company is a manufacturing company that has worked on several production jobs during the 1st quarter of the year. Below is a list of all the jobs for the quarter: Balance Job 356 $ 450 Job 357 $1,235 Job 358 $ 378 Job 359 $

  2. Finance

    Bond value and time--Constant required returns Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 14%, and the company is certain

  3. Accounting

    Ruben Company purchased $100,000 of Evans Company bonds at 100 plus $1,500 in accrued interest. The bond interest rate is 8% and interest is paid semi-annually. The journal entry to record the receipt of interest on the next

  4. Accounting

    Nafari Company's sales budget has the following unit sales projection for each quarter of the calendar year 2011. January -March 1,080,000 April-June 1,360,000 July-September 980,000 October-December 1,100,000 Total 4,520,000

You can view more similar questions or ask a new question.