#25. Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. Tha...
#25. Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $ 5000 in the first year, and will grow by 5% per year, forever. If the interest rate is 12%, how much must Martin provide to fund this bequest?
A. $ 57143 B. $ 71429 C. $ 85714 D. $ 35714
Homework Answers
Value of fund=Cash flow for 1st year/(Interest rate-Growth rate)
=5000/(0.12-0.05)
which is equal to
=$71429(Approx).
Add Answer to:
#25. Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. Tha...
Martin wants to provide money in his will for an annual bequest to whichever of his...
Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $8,000 in the first year, and will grow by 5% per year, forever. If the interest rate is 12%, how much must Martin provide to fund this bequest? A. $91,429 B. $57,143 C. $137,143 D. $114,286
Martin wants to provide money in his will for an annual bequest to whichever of his...
Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provides $1,000 in the first year, and will grow by 7% per year, forever. If the interest rate is 9%, how much must Martin provide to fund his bequest? a. $50,000 b. $25,000 c. $60,000 d. $40,000
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his...
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 Dave just celebrated his 24th birthday and wants to start saving for his...
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...
(10 points) Denzel wishes to save money to provide for his retirement. He will deposit a...
(10 points) Denzel wishes to save money to provide for his retirement. He will deposit a fixed amount into a retirement savings account each month that will earn a 9% APR. He will make monthly deposit for 30 years. Then Denzel wishes to withdraw from this account $6,000 monthly forever. During his retirement years, Denzel wants to keep his money in safer investments, so the fund will only earn a 4% APR. How much should the monthly deposits be for...
Your best friend Dave just celebrated his 24th birthday and wants to start saving for his...
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...
Imari wants to establish a charitable foundation that will make annual scholarship payments forever. Imari wants...
Imari wants to establish a charitable foundation that will make annual scholarship payments forever. Imari wants the foundation to make the first annual scholarship payment in 4 years from today, she wants that first scholarship payment to be 22,410 dollars, and she wants annual scholarship payments to increase by 3.79 percent per year forever. To fund the foundation, Imari plans to make equal annual savings contributions for 3 years. How much does Imari need to save each year for 3...
4-30 A man wants to help provide a college education for A his young daughter. He...
4-30 A man wants to help provide a college education for A his young daughter. He can afford to invest $600/yr for the next 4 years, beginning on the girl's 4th birthday. He wishes to give his daughter $4000 on her 18th, 1gth, 20th, and 21st birthdays, for a total of $16,000. Assuming 5% interest, what uniform annual investment will he have to make on the girl's 8th through 17th birthdays? Tameshia deposits $5500 in her retirement account every year....
Problem #2 (20 pts) 9=21 A man is planning to retire in 30 years. Money can...
Problem #2 (20 pts) 9=21 A man is planning to retire in 30 years. Money can be deposited at 12% Interest compounded monthly and it is also estimated that the future general inflation rate will be 2 per year. He wants to make annual withdrawals of $90,000 in terms of today's dollars over the 20 years of retirement. Assuming that his first withdrawal occurs at the beginning of the first year of retirement a How much money, in terms of...
(the answer is not 1350621.28) Robert became quite well-to-do as founder and president of Carlson Auto...
(the answer is not 1350621.28)
Robert became quite well-to-do as founder and president of Carlson Auto Paint and Supply, Inc. (CAPS). Now, he wants to start a permanent fund to support research directed toward improved sustainability of painted surfaces at his alma mater. He plans to contribute money now so that $200,000 per year can be withdrawn each year forever, beginning in year 10. If the fund earns interest at a rate of 8% per year, how much money must...
Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $8,000 in the first year, and will grow by 5% per year, forever. If the interest rate is 12%, how much must Martin provide to fund this bequest? A. $91,429 B. $57,143 C. $137,143 D. $114,286
(10 points) Denzel wishes to save money to provide for his retirement. He will deposit a fixed amount into a retirement savings account each month that will earn a 9% APR. He will make monthly deposit for 30 years. Then Denzel wishes to withdraw from this account $6,000 monthly forever. During his retirement years, Denzel wants to keep his money in safer investments, so the fund will only earn a 4% APR. How much should the monthly deposits be for...
4-30 A man wants to help provide a college education for A his young daughter. He can afford to invest $600/yr for the next 4 years, beginning on the girl's 4th birthday. He wishes to give his daughter $4000 on her 18th, 1gth, 20th, and 21st birthdays, for a total of $16,000. Assuming 5% interest, what uniform annual investment will he have to make on the girl's 8th through 17th birthdays? Tameshia deposits $5500 in her retirement account every year....
Problem #2 (20 pts) 9=21 A man is planning to retire in 30 years. Money can be deposited at 12% Interest compounded monthly and it is also estimated that the future general inflation rate will be 2 per year. He wants to make annual withdrawals of $90,000 in terms of today's dollars over the 20 years of retirement. Assuming that his first withdrawal occurs at the beginning of the first year of retirement a How much money, in terms of...
(the answer is not 1350621.28)
Robert became quite well-to-do as founder and president of Carlson Auto Paint and Supply, Inc. (CAPS). Now, he wants to start a permanent fund to support research directed toward improved sustainability of painted surfaces at his alma mater. He plans to contribute money now so that $200,000 per year can be withdrawn each year forever, beginning in year 10. If the fund earns interest at a rate of 8% per year, how much money must...
Most questions answered within 3 hours.
-
The expected abnormal earnings of a firm that has earnings of
$40,000 with a required equity...
asked 31 seconds ago -
A spherical surface completely surrounds a collection of
charges. Find the electric flux through the surface...
asked 15 minutes ago -
Two capacitors with capacitances of 12 and 18.1 µF,
respectively, are connected in parallel. The system...
asked 2 minutes ago -
A
runaway train car that has a mass of 1,400 kg travels at a speed of...
asked 1 minute ago -
Let's say you are a small business owner that provides
business-to-business software-as-a-service to non-profit
organizations. Your...
asked 7 minutes ago -
A circuit is constructed with five resistors and a battery as
shown. The battery voltage is...
asked 15 minutes ago -
A. What is the U.S.
economic system and what do you think are the advantages and...
asked 15 minutes ago -
A student measures the following data in a calorimetry
experiment designed to determine the specific heat...
asked 29 minutes ago -
1) 2H2O(g) → 2H2 (g) + O2 (g) DH = 483.6 kJ
If 5 moles of...
asked 34 minutes ago -
Suppose that Alicia has $30,000 in invested as follows: $10,000
in TJX Cos., $15,000 in Macy’s,...
asked 49 minutes ago -
Volunteer Pharmaceuticals (VP) wants to set aside money in the
R&D fund to seek supplemental drug...
asked 50 minutes ago -
What is precedent?
an order by the court.
the power of a court to overrule a...
asked 56 minutes ago