Ask Question
BusinessBusiness
17 July, 09:08

If the horse is found, a prize of $22,300 a year for 20 years is provided. The actual cost to the publisher to purchase an annuity to pay for the prize is $219,000. What interest rate (to the nearest percent) was used to determine the amount of the annuity

+2
Answers (1)
  1. 17 July, 12:25
    0
    8%

    Explanation:

    This type of annuity is an Ordinary annuity; cashflows occur at the end of each year. Even though not mentioned, we assume it's the default scenario. Annuity Due on the other hand has cashflows that occur at the beginning of each year.

    Since this is an annuity problem, you can use a financial calculator to find the interest rate (I) of the annuity.

    Use the following inputs;

    Duration; N = 20

    Present value; PV = - 219000

    Recurring annual payments; PMT = 22300

    One time future value cashflow; FV = 0 (use 0 if not given)

    then compute the interest rate; CPT I/Y = 7.997% or 8%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “If the horse is found, a prize of $22,300 a year for 20 years is provided. The actual cost to the publisher to purchase an annuity to pay ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Leigh has three children but has not written her will which danger will she more than likely face if she dies without a will?
Answers (1)
A retail store credited the sales revenue account for the sales price and the amount of sales tax on sales.
Answers (1)
Real GDP per person in Northland is $30,000, while real GDP in Southland is $10,000, However, Northland's real GDP per person is growing at 1 percent per year, and Southland's real GDP per person is growing at 3 percent per year.
Answers (1)
Question 8 1 pts When Bryce attempted to borrow money at the bank, he learned that his credit score is low.
Answers (2)
If property is inherited by a taxpayer, a. In general, the basis to the recipient is the fair market value at the decedent's date of death. b.
Answers (1)
New Questions in Business
Which of the following situations would be considered cyclical unemployment? Choose one or more: A. A college instructor's contract is not renewed because more people are taking online classes and the college does not need as many classroom
Answers (1)
On July 1, 2021, an interest payment date, $148000 of Coronado Industries bonds were converted into 2980 shares of Coronado Industries common stock each having a par value of $45 and a market value of $56.
Answers (2)
Paul's Landscaping purchased $500 of office supplies on credit. The company's policy is to initially record prepaid and unearned items in balance sheet accounts.
Answers (1)
A product will probably have a relatively high price if
No Answers
Oliver, a widower who does not live in a community property state, sold 50 acres of land he and his wife had paid $10,000 for in 1999. She died in 2009. As of the date of her death, the land was valued at $50,000 for estate tax purposes.
Answers (1)
Home » Business » If the horse is found, a prize of $22,300 a year for 20 years is provided. The actual cost to the publisher to purchase an annuity to pay for the prize is $219,000.
Sign Up Forgot Password?