The present value of 40000 available in 5 years = 40000/(1+r)5 where r is the rate of interest
= 40000/(1.037)5
= 33355.40
Yo do not sign over inheritance because the present value of $40000 to be paid in 5 years $33355.40 that is greater than $30019.86
Your Godmother left you an inheritance of $40,000, payable to you when you tum 26 years...
Your Godmother left you an inheritance of $70,000, payable to you when you turn 26 years old. You are now 21. Currently, the annual rate of interest that can be obtained by buying 5-year bonds is 6.4 percent. Your mother offers you $61,598 64 cash right now to sign over your inheritance. sign over your inheritance because the present value of 570,000 to be paid in 5 years is $(Round your response to two decimal places) You
Intro Your grandmother left you $40,000 that you'll receive when you turn 40 in 21 years. Since you'd rather have some money now, you want to sell your claim to the inheritance. IS Attempt 1/10 for 10 pts. Part 1 What is the minimum amount that you should sell your claim for now if the interest rate is 6%? No decimals Submit IS Attempt 1/10 for 10 pts. Part 2 What is the minimum amount that you should sell your...
7. Your grandfather left an inheritance for you of $80,000. However you can only drawdown on the investment as follows: Years 1 – 4 $10,000 each year and Year 5 $40,000 Interest on the fund is 7.5%. What is the present worth of this inheritance? 10. The face value for Karen’s Limited bonds is $100,000 and has a 2 percent annual coupon. The 2 percent annual coupon bonds matures in 2022, and it is now 2012. Interest on these bonds...
7. Your grandfather left an inheritance for you of $50,000. However you can only drawdown on the investment as follows: Years 1 – 4 $10,000 and Year 5 $40,000 Interest on the fund is 7.5%. What is the present worth of this inheritance?
1. Your godmother has offered to give you $1,000,000 in 20 years. Because of your incredulity, your godmother has volunteered to deposit the present value of the $1,000,000 in a trust managed by a bank or insurance company of your choice. How much must your godmother deposit if the investment earns 5 percent? 10 percent? Show Inputs. [2 points) The higher the rate of interest: A. the larger the present value of a future sum of money B. the smaller...
Ten years from now, you will receive a generous inheritance in the amount of $65,000. The inheritance currently sits in an investment account that earns 7.5% interest. How much is the inheritance worth right now, if it will be received in 10 years? Solve the problem in EXCEL using an EXCEL spreadsheet function. Make sure to fill in your columns with information and use the appropriate Excel function to give the final answer.
You are managing a portfolio of $1.0 million. Your target duration is 26 years, and you can choose from two bonds: a zero-coupon bond with maturity five years, and a perpetuity, each currently yielding 2%. a. How much of (i) the zero-coupon bond and (ii) the perpetuity will you hold in your portfolio? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. How will these fractions change next year if target duration is now twenty five...
5. Your inheritance will pay you $100,000 a year for five years beginning now. You can invest it in a CD that will pay 7.75 percent annually. What is the present value of your inheritance? (Round to the nearest dollar.) A) $399,356 B) $401,916 C) $433,064 D) $467,812 6. Your father is 60 years old and wants to set up a cash flow stream that would be forever He would like to receive $20,000 every year, beginning at the end...
Your uncle, in his will, left you the sum of $40,000/year forever with payments starting three years (Year 3) from today (Year 0). However, the news is even better. He has specified that the amount would grow at 2% per year after the first payment to offset inflation rate (i.e., the second payment would be $40,000 x (1 + 0.02)). With an APR of 3% compounded annually, what is the PV of the inheritance today? (Draw the time line and...
When you were two-years-old, your grandmother left you a trust fund with $10,000 in it that has been earning 12% for 20 years. How much is in the trust fund now, based on annual compounding? (use financial calculator and please show work).