Annuities and Perpetuities In this assignment different mortgage rates are discussed and compared to know about the cheapest rate. It was supposed to collect mortgage data for 10 years‚ 15 years and 30 years but unfortunately 10 years mortgage rate was not available for the mortgage lender companies we have selected. In the next step‚ these rates are converted into Effective Annual Rates (EAR’s) and then requirements are fulfilled in theoretical terms. Rates in Table When some mortgage loan
Premium Interest Mortgage loan Loan
Basic Formulas: Present value interest factor of an annuity‚ PVIFA(k‚n) = [ 1 – ( 1 + k )-n ] / k Present value interest factor of a perpetuity‚ PVIFA(k; ∞) = 1 / k Future value interest factor of an annuity‚ FVIFA(k‚n) = [ ( 1 + k )n –1 ] / k Annuities Due‚ payments at start of period‚ PVIFADue(k‚n) = PVIFA(k‚n) * ( 1 + k ) FVIFADue(k‚n) = FVIFA(k‚n) * ( 1 + k ) Where: k is the effective discount rate
Premium Time value of money Time Future value
ANNUITY DUE An annuity for which the periodic payments are made at the beginning of each payment interval. The term of an annuity due begins on the date of the first payment interval after the last payment is made. FUTURE VALUE OF ANNUITY DUE 1. Using the Annuity Table * Uses the same table as ordinary annuities but with some modifications. Example : Ferdie Gonzales deposited P6‚000 at the beginning of each month‚ for 2 years at his credit union. If the
Premium Time value of money Time Compound interest
Annuities An annuity is a financial product sold by financial institutions that is designed to accept and grow funds from an individual and then payout a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years. A fixed sum of money paid to someone each year‚ typically for the rest of their life. Annuities are a popular choice for investors who want to receive a steady
Premium Investment Money Withdrawal
teaching methods in college differ between the U.S. and China? There are a lot of differences in the cultural and customs between U.S. and China. The teaching methods in college are real different in this two country because of this. I have study in the college in China last year‚ and I am studying in the college in the U.S. now. I have experienced the different teaching methods. Some of the teaching methods are same‚ but a great many of them are different. In my opinion‚ the teaching methods in college
Premium Higher education Learning Community college
How to Calculate Present Values Answers to Problem Sets 1. If the discount factor is .507‚ then .507*1.126 = $1 2. 125/139 = .899 3. PV = 374/(1.09)9 = 172.20 4. PV = 432/1.15 + 137/(1.152) + 797/(1.153) = 376 + 104 + 524 = $1‚003 5. FV = 100*1.158 = $305.90 6. NPV = -1‚548 + 138/.09 = -14.67 (cost today plus the present value of the perpetuity) 7. PV = 4/(.14-.04) = $40 8. a. PV = 1/.10 = $10 b. Since the perpetuity will be
Premium Net present value Present value Time value of money
RULE AGAINST PERPETUITY INTRODUCTION The rules of law affecting perpetuities are based upon considerations of public policy. Although the principle of private ownership requires that an owner of property is to have power to dispose as he thinks fit‚ either during life or on death‚ of his whole interest in the property he owns‚ public policy requires that the power should not be abused. Accordingly from early times‚ the law has discouraged dispositions of property‚ which either impose
Free Common law Law Property
and waterfall method are two of the most common methods when it comes to how to approach software development. Every company has a preference when it comes to the method they use and while there are some similarities between the two methods‚ there are also quite a few differences. In Subhajit Datta’s article‚ he mentions that the waterfall method identified core elements within the software development process that have since been adapted by other methods‚ including the agile method. The similarities
Premium Software development process Software engineering Systems Development Life Cycle
technologies (Bebb‚ 1989; Dumaine‚ 1989a & b; Blackburn‚ 1991; Clark and Fujimoto‚ 1991; Ulrich and Eppinger‚ 2000). To understand the relationships between JIT manufacturing and simultaneous NPD process‚ let’s briefly review the principles of JIT systems. Just-in-Time (JIT) production has been a great force in the world of manufacturing since the early 1980’s. Some of the main benefits of JIT in the area of manufacturing such as inventory
Premium Management Economics Strategic management
As a finance major currently signed up for the CFA charter‚ I inspire to go into the financial services industry. This specific industry has a long and significant history of high profile legal issues. The topics discussed within business law will surely come up in my near future within the financial services professional world. With the emergence of new investment vehicles and technology‚ there have been many elaborate insider trading and financial fraud crimes that have occurred in the last decade
Premium Financial services Investment Collective investment scheme