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1. You are offered three annuities (these make equal payments over a specific period). Using an annual 5.5% discount rate, calculate each annuity's price: # Price ($) ? Life (yrs.) 1 6 Payments (Slmonth) 195 200 (growing @1%/yr.) 135 (growing @2.5%/yr.) 2 ? 5 Forever 3 ? 00 0.0 LINE D8 Formatting fx B A D E F G H Annulty 2 200 Monthly payments Discount rate Growth rate Price to be paid Monthly cash flows: 1 195 5.5% 0.0% 11.935.45 5.5 0.0008333396 10,719.92 3 135 5.5% 0.002083333% 54,000 1 2 3 4 5 6 7 8 9 10 11 12 13 1 2 3 4 5 6 7 8 9 0 1 2 3 24 5 26 27 28 29 30 31 32 33 34 184.59 369.18 553.76 738.35 922.94 1,107.53 1,292.11 1,476,70 1,661.29 1.845.88 2,030,47 2,215.03 2,399.64 2,584.23 2,768.82 2,953.40 3,137.99 3,322 58 3,507.17 3,691.76 3,876.34 4,060.93 4,245.52 4,430.11 4,614.69 4,799.28 4,983.87 189 379 568 757 947 1,136 1.325 1,515 1,704 1,893 2,083 2,272 2,461 2,650 2,840 3,029 3,218 3,408 3,597 3,786 3,976 4,165 4,354 4,544 4.733 4,922 5,112 IS 16 17 18 19 20 21 22 23 24 25 26 27 B 5. 7 B 9 0 1 2 54 55 56 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 SI 52 53 54 55 56 57 58 39 60 61 62 63 64 4,799.28 4,983.87 5,168.46 5,353.05 5,537.63 5,722.22 5,906.81 6,091.40 6,275.99 6,460.57 6,645.16 6,829.75 7,014.34 7.198.92 7.383.51 7.568.10 17.752.69 7.93728 8.121 86 81306.45 8,491.04 8.675.63 8.86021 9,044.80 9.229.39 9.413.98 9598 9,783.15 9,967,04 105233 10,336.92 10,521 50 10,706.09 10,890.68 11.075.27 11.259.86 IT44..44 11.629.03 11.813.63 4922 5,112 5,301 5,490 5,680 5,869 6,058 6,248 6,437 6,626 6,816 7,005 7.194 7,384 7,573 7,762 7.951 8,141 8,330 8,519 8,709 8,898 9,087 9,277 9,466 9,655 9,845 10,034 10.223 10,413 10,602 10,791 10,981 11,170 11.359 58 59 60 61 62 63 64 65 66 67 58 69 70 71 + 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 3 3 8,330 8,519 8,709 8,898 9,087 9,277 9,466 9,655 9,845 10,034 10,223 10,413 10,602 10,791 10,981 11,170 11,359 8,121.86 8,306.45 8,491.04 8,675.63 8,860.21 9,044.80 9,229.39 9,413.98 9,598.57 9,783.15 9,967474 10.152.33 10,336.92 10,521.50 10.706.09 10,890.68 11.075.27 11.259.86 11,444.44 11,629.03 11,813.62 11,998.21 12.182.79 12,367.38 12.551.97 12,736.56 12.921.13 13.105.73 13.290.32 5 5 2 B 9 0 1 2 13 -4 15 6 7 -8 79 30 81 Proh1 Prob

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