Question

Attention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more. 19. More on the time value of money Aa Aa E Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce attorneys. The membership dues for the ADLA are $550 per year and must be paid at the beginning of each year. For instance, membership dues for the first year are paid today, and dues for the second year are payable one year from today. However, the ADLA also has an option for members to buy a lifetime membership today for $5,000 and never have to pay annual membership dues. Obviously, the lifetime membership isn't a good deal if you only remain a member for a couple of years, but if you remain a member for 40 years, it's a great deal. Suppose that the appropriate annual interest rate is 7.5%. What is the minimum number of years that Lloyd must remain a member of the ADLA so that the lifetime membership is cheaper (on a present value basis) than paying $550 in annual membership dues? (Note: Round your answer up to the nearest year.) O 21 years O 16 years O 18 years O 14 years In 1626, Dutchman Peter Minuit purchased Manhattan Island from a local Native American tribe. Historians estimate that the price he paid for the island was about $24 worth of goods, including beads, trinkets, cloth, kettles, and axe heads. Many people find it laughable that Manhattan Island would be sold for $24, but you need to consider the future value (FV) of that price in more current times. If the $24 purchase price could have been invested at a 6% annual interest rate, what is its value as of 2012 (386 years later)? $161,797,972,174.50 $185,715,933,278.55 $140,693,888,847.36 $119,589,805,520.28

Answer 1

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PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins File Home Insert Page Layout Formulas Data - 2x % Cut Calibri r General 11 - AA = = = A E E E *Wrap Text FMerce Merge & Center - Center BI U D s $ -% % 4.0 .00 Insert Delete Format E Copy Paste Format Painter Clipboard BM528 Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Sort & 2 Clear Filter Editing Find & Select Alignment Number Cells Font for BM BK BL BN ВО BP BQ BR BS 528 529 530 LIFETIME MEMBERSHIP ANNUAL PAYMENT RATE YEARS ANSWER: 14 YEARS (ROUND UP] 5000 550 ANNUITY DUE 7.50% 13.91 EXCEL ENPER(BO530,-B0529,B0528,,1) 531 532 533 534 535 24 536 386 PV YEARS RATE FUTURE VALUE 6.00% 140693888847.34 EXCEL = FV(BO536,30535,-B0534) 537 538 539 540 541 542 543 544 545 WE Rea CAP STRU VALUE profit margin_loan with points LOCK BOX DILUTION DOLLAR COST AVG CALCULATOR LOAN OPTIONS pv, fv, annuity ferences: X262 EXPONPER APR CPI ear FVAPO BOI 140% 0 DOR . * ENG 04-11-2019