E-Mail Address: support@swiftassignments.com
Time Value of Money: Annuity Cash Flow
Time Value of Money: Annuity Cash Flow
Please follow the instructions in the assessment instructions.
Overview
Respond to four questions and solve three computational problems about time value of money (TMV) as it applies to annuity cash flows.
You know how the TVM concept as applies to single cash flow. However, in real life you will come across financial applications that require multiple or annuity cash flows. That is why it is important to know how to apply the TVM concept to annuity cash flows; for example, how to amortize a mortgage or car loan.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 1: Evaluate the global financial environment.
- Explain why a saver would prefer more or less frequent interest compounding periods.
- Explain the purpose of an amortization schedule.
- Competency 2: Define finance terminology and its application within the business environment.
- Describe uses of an amortization schedule.
- Explain why interest paid in the early years of a home mortgage is more helpful in reducing taxes than interest paid in later years.
- Explain the differences between an ordinary annuity and an annuity due.Assessment Instructions
Respond to the questions and complete the problems.
Questions
In a Word document, respond to the following. Number your responses 1–4.
- Explain whether you would you rather have a savings account that paid interest compounded on a monthly basis or compounded on an annual basis? Why?
- Describe what an amortization schedule is and its uses. Explain the purpose of an amortization schedule.
- Interest on a home mortgage is tax deductible. Explain why interest paid in the early years of a home mortgage is more helpful in reducing taxes than interest paid in later years.
- Explain the difference between an ordinary annuity and an annuity due.
Use references to support your responses as needed. Be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.
Problems
In either a Word document or Excel spreadsheet, complete the following problems.
- You may solve the problems algebraically, or you may use a financial calculator or an Excel spreadsheet.
- If you choose to solve the problems algebraically, be sure to show your computations.
- If you use a financial calculator, show your input values.
- If you use an Excel spreadsheet, show your input values and formulas.
In addition to your solution to each computational problem, you must show the supporting work leading to your solution to receive credit for your answer.
- If interest rates are 8 percent, what is the future value of a $400 annuity payment over six years? Unless otherwise directed, assume annual compounding periods.
- Recalculate the future value at 6 percent interest and 9 percent interest.
- If interest rates are 5 percent, what is the present value of a $900 annuity payment over three years? Unless otherwise directed, assume annual compounding periods.
- Recalculate the present value at 10 percent interest and 13 percent interest.
- What is the present value of a series of $1150 payments made every year for 14 years when the discount rate is 9 percent?
- Recalculate the present value using discount rate of 11 percent and 12 percent
Click here to ORDER an A++ paper from our MASTERS and DOCTORATE WRITERS
WhatsAppWho We Are
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Do you handle any type of coursework?
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
Is it hard to Place an Order?
1. Click on the “Order Now ” on the main Menu and a new page will appear with an order form to be filled.
2. Fill in your paper’s requirements in the “PAPER INFORMATION” section and the system will calculate your order price/cost.
3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
100% Reliable Site. Make this your Home of Academic Papers.
 |
 |
Always Order High-Quality Academic Papers from HERE
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.
SCORE A+ WITH HELP FROM OUR PROFESSIONAL WRITERS: ORDER NOW FOR AN ORIGINAL PAPER ASSIGNMENT
We will process your orders through multiple stages and checks to ensure that what we are delivering to you, in the end, is something that is precise as you envisioned it. All of our essay writing service products are 100% original, ensuring that there is no plagiarism in them. The sources are well-researched and cited so that it is interesting. Our goal is to help as many students as possible with their assignments, i.e. our prices are affordable and services premium.