Suppose you just bought a 11-year annuity of 15100 per year, Ask an Expert

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Suppose you just bought a 11-year annuity of $15,100 per year at the current interest rate of 10.25 percent per year.

1. What is the value of the investment at the current interest rate of 10.25 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Value of investment $

2. What happens to the value of your investment if interest rates suddenly drop to 5.25 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Value of investment $

3. What happens to the value of your investment if interest rates suddenly rise to 15.25 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Value of investment $

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Financial Management, Finance

Category:- Financial Management
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