8)
I) Future Value of Annuity due
F = A[(1+r)^n - 1]/r(1+r)
Here A = 2000
r = 8%
n = 10
F = 2000*[(1.08)^10 - 1]/0.08*1.08 = 31290.97
This future value will be reinvested for next 30 years
Final Future Value = 31290.97(1.08)^30 = 314870.30
ii)
F = 2000*[(1.08)^30 - 1]/0.08*1.08 = 244691.7
iii)
F = 2000*[(1.08)^40 - 1]/0.08*1.08 = 559562.1
8,9and 10 also please draw cash flow diagrams customer service department. I he company can earn...
Hermes Conrad is celebrating his birthday and wants to start saving for his anticipated retirement. He has the following years to retirement and retirement spending goals: Years until retirement = 30; Amount to withdraw each year = $90,000; Years to withdraw in retirement = 20; Investment rate = 8%. Because Hermes is planning ahead, the first withdrawal will not take place until one year after he retires. He wants to make equal annual deposits into his account for his retirement...
Please, show simple process with explanations, so I can study it. Thank you 9. (10 marks) Jane Smith wants to retire 20 years from now. Money can be deposited in an account at an actual interest rate of 12% compounded monthly. The future general inflation rate is estimated to be 4% per year. What monthly deposits in actual dollars must be made by the woman until she retires so that she can withdraw an annual amount of $40,000 (in terms...
8-One year from now, you deposit $300 in a savings account. You deposit $1,800 the next year. Then you wait two more years (until 4 years from now) and deposit $1,000. If your account always earns 6% annual interest and you make no withdrawals, how much will be in the account 11 years from now? 9-You deposit $5000 for 5 years at 4% annual interest. In 5 years, you add $15,000 to your account, but the rate on your account...
Please answer the following on a financial calculator with given steps. You won a lottery! To collect your winnings you will be paid annual amounts of $10,300 for each of the next 22 years. The appropriate discount rate is 10 percent per year Calculate the difference in the present value if you are paid these annual amounts of money at the beginning of each year rather than at the end of each year. Jessica would like to buy an annuity....
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his anticipated retirement. Dave plans to retire in 36 years and believes that he will have 25 good years of retirement and believes that if he can withdraw $125,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Dave for all scenarios presented below is 6.5% per year. This is an annual rate, review each...
Your best friend Frank just celebrated his 30th birthday and wants to start saving for his anticipated retirement. Frank plans to retire in 35 years and believes that he will have 20 good years of retirement and believes that if he can withdraw $90,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Frank for all scenarios presented below is 8% per year. This is an annual rate, review each...
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his anticipated retirement. Dave plans to retire in 36 years and believes that he will have 25 good years of retirement and believes that if he can withdraw $125,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Dave for all scenarios presented below is 6.5% per year. This is an annual rate, review each...
This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 35 Amount to withdraw each year $85,000 Years to withdraw in retirement 25 Interest rate 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into her account...
Question 6: This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 35 Amount to withdraw each year $85,000 Years to withdraw in retirement 25 Interest rate 7.5% Because your friend is planning ahead, the first withdrawal will not take place until one year after she retires. She wants to make equal annual deposits into...
Your best friend Frank just celebrated his 30th birthday and wants to start saving for his anticipated retirement. Frank plans to retire in 35 years and believes that he will have 20 good years of retirement and believes that if he can withdraw $90,000 at the end of each year, he can enjoy his retirement. Assume that a reasonable rate of interest for Frank for all scenarios presented below is 8% per year. This is an annual rate, review each...