After he was injured in a car accident, the insurance company promised to pay Fred $2,000...
After he was injured in a car accident, the insurance company promised to pay Fred $2,000 per month for 8 years. Assuming Fred's opportunity cost is 10.5 percent annually, what is the present value of Fred's settlement?
Solve using excel cell functions
Homework Answers
| Period (in years) | 8 |
| Monthly payment | $2,000 |
| Opportunity cost | 10.5% |
| Future value | $0 |
| Present value | $129,533.54 |
Calculations
Payment is monthly. so opportunity cost will be monthly and period will also be in months.
monthly payment is entered as negative value so that formula gives present value as positive value.
Add Answer to:
After he was injured in a car accident, the insurance company
promised to pay Fred $2,000...
1. Fred was on the seven year plan at the University of South Carolina and racked...
1. Fred was on the seven year plan at the University of South Carolina and racked up $98,000 in student loans, which carry an annual interest rate of 10.8 percent and require monthly payments. His mom has offered to help him pay them off, but she wants to see him become responsible (good luck on that). She has said that if he pays off half of the debt within three years, she will pay the rest. How much would Fred...
Due to a car accident you receive a settlement from insurance of $50 a month for...
Due to a car accident you receive a settlement from insurance of $50 a month for the next ten years. What is that worth to you today, assuming a 3% inflation rate? Show equations and work.
Due to a car accident you receive a settlement from insurance of $50 a month for...
Due to a car accident you receive a settlement from insurance of $50 a month for the next ten years. What is that worth to you today, assuming a 3% inflation rate? Show equation and work.
Due to a car accident you receive a settlement from insurance of $50 a month for...
Due to a car accident you receive a settlement from insurance of $50 a month for the next ten years. What is that worth to you today, assuming a 3% inflation rate? Show all work.
3. Joe Smo was recently involved in an accident. Based on the settlement he will receive...
3. Joe Smo was recently involved in an accident. Based on the settlement he will receive $1,000,000. According to the settlement, the insurance company will pay him $500,000 today of which three hundred thousand will go to the lawyer. Joe Smo will receive $50,000 for eight years. At the end of the eighth year, he will receive the remaining $100,000. Assuming the discount rate is 8 percent, what is the present value of the funds Joe Smo will receive? (She...
Stephanie was injured in a car accident and was rushed to the emergency room. She received...
Stephanie was injured in a car accident and was rushed to the emergency room. She received stitches for a facial wound and treatment for a broken finger. Under Stephanie’s PPO plan, emergency room care at a network hospital is 70 percent covered after the member has met a $300 annual deductible. Assume that Stephanie went to a hospital within her PPO network. Her total emergency room bill was $840. (a) What amount did Stephanie have to pay? (Do not round...
3. You are deciding between leasing or purchasing a car and you need the car for...
3. You are deciding between leasing or purchasing a car and you need the car for the next four years. The details of these two alternatives are discussed below. Buy The initial cost will be $35,000. There will be major maintenance every two years, costing $2,000. The annual insurance on the car will cost $3,200 annual and the gas will cost $1,800 annually. You expect to sell the car for $8,000 dollars at the end of the four years. Lease...
475 Fred is evalaating whether a more efficient monon with a life of 5 years should...
475 Fred is evalaating whether a more efficient monon with a life of 5 years should be insalled on an assembly line. If the interest rate is 10%. what is the present value of the energy savings (a) Energy savings are estimated at $4000 for the first year,then increasing by 7%-anually (b) What if the energy savings are increasing by 12% annually? 438 An engineering student bought acar ata local wed car lot. Including tax and insurance, the sotaill price...
Please solve using a BA II Plus calculator and not using NPV. Fred is looking at...
Please solve using a BA II Plus calculator and not using NPV. Fred is looking at an investment that would pay him nothing until five years from today and then he would receive $40,000 every six months for ten years (20 payments) with the first payment coming five years from today. He then would receive $100,000 every year for ten years with the first of these coming six months after the last payment of $40,000. Finally he would receive two...
In five years, Kent Duncan will retire. He is exploring the possibility of opening a self-service car wash. The car wash could be managed in the free time he has available from his regular occupation, and it could be closed easily when he retires. After c
In five years, Kent Duncan will retire. He is exploring the possibility of opening a self-service car wash. The car wash could be managed in the free time he has available from his regular occupation, and it could be closed easily when he retires. After careful study, Mr. Duncan determined the following: A building in which a car wash could be installed is available under a five-year lease at a cost of $1,700 per month.Purchase and installation costs of equipment would...
3. Joe Smo was recently involved in an accident. Based on the settlement he will receive $1,000,000. According to the settlement, the insurance company will pay him $500,000 today of which three hundred thousand will go to the lawyer. Joe Smo will receive $50,000 for eight years. At the end of the eighth year, he will receive the remaining $100,000. Assuming the discount rate is 8 percent, what is the present value of the funds Joe Smo will receive? (She...
3. You are deciding between leasing or purchasing a car and you need the car for the next four years. The details of these two alternatives are discussed below. Buy The initial cost will be $35,000. There will be major maintenance every two years, costing $2,000. The annual insurance on the car will cost $3,200 annual and the gas will cost $1,800 annually. You expect to sell the car for $8,000 dollars at the end of the four years. Lease...
475 Fred is evalaating whether a more efficient monon with a life of 5 years should be insalled on an assembly line. If the interest rate is 10%. what is the present value of the energy savings (a) Energy savings are estimated at $4000 for the first year,then increasing by 7%-anually (b) What if the energy savings are increasing by 12% annually? 438 An engineering student bought acar ata local wed car lot. Including tax and insurance, the sotaill price...
Most questions answered within 3 hours.
-
Based on how much or how little you have noticed in the media,
do you think...
asked 25 minutes ago -
I calculate Rosetta Stone’s P/E ratio as 10x prior to a report
about future industry growth....
asked 1 hour ago -
What major physiological changes account for electrodermal
activity (as in during a lie-detector test)?
asked 2 hours ago -
You are going to sell fruits & vegetables at a local
roadside market. List separately and...
asked 3 hours ago -
Hows does water affect the digestion of fats ?
asked 5 hours ago -
A buffer that contains 0.41 M of a base, B and 0.21 M of its
conjugate...
asked 5 hours ago -
Pleaaaaaaaasssssse help me please please it's more important
:((((((((((((((((((((
CASE STUDY
Nissan Company
Nissan Motor Company,...
asked 5 hours ago -
Calculate the concentration of hydronium and hyroxide ions in 1)
2.0 mol/L HNO3 2) 0.5 mol/L...
asked 6 hours ago -
In a loop-the-loop ride a car goes around a vertical, circular
loop at a constant speed....
asked 6 hours ago -
50 grams each of water (18.015 g/mol) and ethylene glycol
(C2H6O2) (62.07 g/mol) are mixed. At...
asked 6 hours ago -
The life expectancy of sport utility vehicles follows a normal
distribution with a mean of 145.8...
asked 6 hours ago -
If an object with mass of 5 kg is pushed with a force of 552 N,...
asked 6 hours ago