Annuity Immediate Quote

In my finance class we’re doing annuities and I need to know when to set my calculator to BEG and when I should set it on END.

A project under consideration costs $750,000, has a 5-yr life, and has no salvage value. Depreciation is straight-line to zero.The required return is 17%,and the tax rate is 34%.Sales are projected at 500 units per yr.Price per unit is $2,500,variable cost per unit is $1,500,and fixed costs are $200,000 per yr.
A)Suppose you think that the unit sales,price,variable cost,and fixed cost projections given here are accurate to within 5%.What is the base-case NPV? What are the best and worse case scenario NPVs?
Ok in the book this is what it reads:(I’ll only give you best-case b/c I won’t have enough space to write it here. Hopefully I will know what to do with the others)Depreciation is $150,000 per yr. At 17%,5 yr annuity factor is 3.19935
Best Case
Unit Sales=525
Unit Price=2,625
Unit Variable Cost=1,425
Fixed Cost=190,000
Cash Flow=341,400
So my question is how did they get 341,400 as the cash flow, and how did they get 3.19935 as the annuity factor?
For the 3.19935, how do I use a calculator? What do I need to key in?

I am going over a question that provides somewhat of a solution, but I can’t figure out what I need to punch into my financial calculator to give me the same answer.

1. Your cousin just came home from a poker tournament in Las Vegas and is now trying to
pay off a gambling debt of $5,000. You have agreed to pay off the debt for him today,
and in return he has agreed to pay you $250 per month over the next two years with
payments beginning immediately. What is the effective annual interest rate you are
charging him?

A) 19.75%
B) 19.86%
C) 21.77%
D) 22.26%
E) 23.45%

Answer C
5,000 = 250 x PVIFA (i,24) x (1+i) because it is an annuity due
Solve for i using your financial calculator: i = 1.6550%
EAR = (1 + im )m -1 = (1.01655)12-1 = 21.77%

Yes the solution is provided, but I can’t figure out how to solve for i using my financial calculator.

I am definitely considering entering the insurance industry, notably life/health and I also might want to sell annuities. But would it be beneficial to stay in finance with the economy being so bad???

I am trying to get past it and I am totally stuck!

My 80-year old mother’s financial advisor just sent me this email. A few years ago he recommended an annuity, so I’m not sure I can trust his advice. What do you think he intends to do, and is it reasonable?

I would suggest that we move 100K of the almost 400K that will be earning 4.1% in her savings account. My recommendation would then be to allocate 40K into each of the two programs that I would recommend. One is yielding 6.2% and the other 6.3%. We would leave the remaining 20K in money market (currently earning 4.5% but will fluctuate and is subject to change as rates change). My objectives for these investment recommendations are preservation of principal, steady income, and capital appreciation on the back end of the program. Our total return target over the life of the program is an annualized total return of 9% -10%. There is no commission, load or ongoing fee paid by the client to go into these programs so the yield is a net yield.
Thanks for everything so far! Here’s more:
There are several investment programs with which I work that are direct investment programs that are non-correlated to the stock market or to the bond market, are non-traded and therefore do not change in value (share price is stable at $10.00) and are earning yields of 6.2% and 6.3%. We can re-invest the dividends or have the dividends swept into a money market.

I have a survivor annuity, which I receive a monthly deposit from, that I am supposed to receive until I die, but with the obvious failure of the bailout, and the cumulative degradation of the stock market, I am unsure as to what is going to happen to it. Is this annuity at risk, and, if so, what can I do to get it out of harm’s way? Should I turn it to gold or something?

How do I solve for the number of periods with an annuity on a financial calculator? (Which buttons to press)

Problem details: Guy wants to retire with $500,000 by investing $8,000 per year in the stock market (starting at the end of this year). 15% average annual return. How long to save money before retirement?

I had:

FV = 500,000
Interest Rate = 15
Payment = 8,000
0 N(15%, PMT 8,000, PV 0)
…this keeps coming out 0.. which makes sense from the formula (cause PV is 0). I now know the answer is 17 years from guessing, but I need to know how to do this on a calculator.

Any help is appreciated. Thank you.

Financial calulator to find interest on bonds payable and receivables, Future Value of 1, present value of annuity

How do I use my financial calculator to find the factor for the present value of an ordinary annuity?

For example, 14 periods at 8% should yield 8.2442. I’m getting 13.4130. I have an HP10bII if that helps.

What type of investment is the contra fund? Is it too aggressive for a retired person to invest in?

I’m trying to get the present value of interest on a bond.
face value is 500,000, interest is 12% for five years paid semi annually.
Using an ordinary annuity table I get 7.3601 as the factor, but for the life of me I cannot remember how to use a financial calculator to solve this problem. Can you tell me what keys I should use to answer problems like this?

Son beats his father with tennis

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