Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1. Peggy gets paid every other week (bi-weekly) and her husband Patrick gets paid monthly. Peggy is going to make a $150 deposit from her paycheck every two weeks into a new retirement fund, and Patrick is going to deposit $300 from his paycheck monthly into a new retirement fund. Both accounts earn an effective annual rate of 6%. Peggy's account compounds bi-weekly and Patrick's fund compounds monthly that matches their deposits.

a. What together can Peggy and Patrick expect to receive from their deposits in 30 years?
b. How much would Patrick have to deposit each month for the combined savings to achieve $1 million in thirty years? (Peggy would continue as above.)

2. Kim is evaluating her retirement plan. Suppose she has $500,000 when she retires in an account that earns at an effective annual rate of 9%.

a. If Kim withdraws $75,000 annually, how long will her funds last?
b. To make the funds last 25 years, how much can Kim withdraw annually?
c. Kim is considering a two phase withdrawal where she withdraws $60,000 annually for 10 years, and then $35,000 thereafter (when social security starts). How long will her funds last assuming that the 9% rate of return (EAR) is accurate for both phases of the retirement plan.

3. Peggy gets paid every other week (bi-weekly) and her husband Patrick gets paid monthly. Peggy is going to make a $150 deposit from her paycheck every two weeks into a new retirement fund, and Patrick is going to deposit $300 from his paycheck monthly into a new retirement fund. Both accounts earn an effective annual rate of 6%. Peggy's account compounds bi-weekly and Patrick's fund compounds monthly that matches their deposits.

a. What together can Peggy and Patrick expect to receive from their deposits in 30 years?
b. How much would Patrick have to deposit each month for the combined savings to achieve $1 million in thirty years? (Peggy would continue as above.)

4. John is going to buy a new car costing $24,000. Wealthy Uncle Job offered a choice of three loans as described below. The annual percentage rate with monthly compounding for all three alternative loans would be 3.25% and the loans would be for 4 years. Determine the payment amount that John would have to make for each loan alternative?

Loan 1 Loan 1 would be for the total cost of the car and John would pay equal monthly payments to Uncle Job .
Loan 2 Loan 2 would be for the total cost of the car with John making a $3,000 payment at the end of the loan and equal annual payments to Uncle Job for the remainder.
Loan 3 Loan 3 would have John using $3000 of his personal savings upfront to reduce the loan size and John would make equal monthly payments to Uncle Job.

5. Pat Davis has earned a promotion that will pay an annual bonus of $10,000 at the end of the first year and increase by 12% each year thereafter. He is going to deposit his annual bonus into a fund that has an annual percentage rate of 5% compounded monthly that presently has $30,000 in it. He plans to retire in 15 years. How much will be in the fund at the time he retires?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M925549

Have any Question? 


Related Questions in Basic Finance

Determine the appraised value a fire station built four

Determine the appraised value. A fire station, built four years ago, has an estimated life of 50 years. The building has 20,000 square feet and the cost to replace is $100 per square foot. The lot is worth $120,000 vacan ...

Chris and harold yoshida are a young couple with a growing

Chris and Harold Yoshida are a young couple with a growing income. What will happen to their demand for money over time?

Explain the changes in m1 and m2 if an individual moves

Explain the changes in M1 and M2, if an individual moves money from a small denomination time deposit to a demand deposit account?

Regarding the rules of probability which of the following

Regarding the rules of probability, which of the following statements is correct? A. If A and B are independent events, then P(B) = P(A)P(B). B. The sum of two mutually exclusive events is one. C. The probability of A an ...

If you suspect that a companys advertising expenditures in

If you suspect that a company's advertising expenditures in a given month affect its sales in future months, what correlations would you look at to confirm your suspicions? How would you find them?

What are derivatives define forward futures and option

What are derivatives? Define forward, futures, and option agreements. What are the underlying instruments in these agreements?

Mustard patch doll company needs to purchase new plastic

Mustard Patch Doll Company needs to purchase new plastic moulding machines to meet the demand for its product. The cost of the equipment is $100,000. It is estimated that the firm will generate, after tax, operating cash ...

Essay questionsmust include references1 the time value of

Essay questions,must include references 1. THE TIME VALUE OF MONEY Some financial advisors recommend you increase the amount of federal income taxes withheld from your paycheck each month so that you will get a larger re ...

1 the probability that a manager who makes business

1. The probability that a manager who makes business transactions in a foreign language is 0.2. Ten (10) managers are chosen randomly. a) What is the probability that none make commercial transactions foreign language? b ...

A investor was considering purchasing treasury bonds

An investor was considering purchasing Treasury bonds. Five-year bonds had a 3% yield and 2-year bonds had 2% yield. The investor chose the 5-year bond at a par price for a 3% yield. Subsequently, even though market inte ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate