Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1. Your family members know you are taking this class and you learned about time value of money. Four of them came separately to ask problems relating to time value of money. Use the applicable interest table at the end of the book to compute the unknowns for your four relatives. Note that each is independent.
a. Your cousin asked how much he must contribute at the end of the each of the next eight years if he wants to accumulate $90,000 in his account by the end of the eighth year. Cousin told you the interest is compounded annually and the account will earn interest rate of 8%.
b. Your 40-year old Aunt plans to retire at age 65. She is getting a late start but wants to start contributing towards her retirement from now (age 40) through age 64. How much must she contribute each year if he plans to accumulate $500,000 by the time he retires; if he will earn 12% annual interest and interest is compounded annually?
c. Your sister owes $47,347 on her student loan. She wants to pay off before she retires. She has $20,000 today and she will invest the $20,000 in an account that pays 9% interest. How many years will it take for the $20,000 to grow so she can have enough money to pay off the $47,347 debt assume the debt amount is fixed?
d. Your uncle currently has a $27,600 loan. He plans to repay the loan in four years. She plans to invest $19,553 for the next four years and use the principal and interest balance in the account to pay off the loan. What rate of interest must your uncle earn annually so he can have enough to pay off the loan?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M923887

Have any Question? 


Related Questions in Basic Finance

The bermuda triangle store pays a constant dividend last

The Bermuda Triangle Store pays a constant dividend. Last year, the dividend yield was 5.4 percent when the stock was selling for $15 a share. What must the stock price be today if the market currently requires a 3.8 per ...

1 what are special allocations2 what causes the after-tax

1. What are special allocations? 2. What causes the after-tax IRR (ATIRRe) for the general partner to differ from that of the limited partner? 3. What is the significance of capital accounts? What causes the balance in a ...

1 a 75000 mortgage is obtained at 9 it should be paid in 20

1. A $75,000 mortgage is obtained at 9%. It should be paid in 20 years. Find the payment at the start of each month. 2. Herb is a self-employed agent who is setting his own retirement fund. He is depositing $17,000 a yea ...

Nicollette nbspjoined towson university basketball team

Nicollette  joined Towson University basketball team since summer 2015. On average, she is able to score 30% of the field goals. Assume she tries 15 field goals in a game. (a) Let X be the number of field goals that Mimi ...

One bond in forest inc has 9 years to maturity and a coupon

One bond in Forest, Inc., has 9 years to maturity and a coupon of 4.2%. The coupon is paid semiannually. If the YTM is 6%, what is the value of the bond? Marcia Food Company has a bond with 15 years to maturity and a cou ...

In 2010 toyota recalled millions of automobiles to fix a

In 2010, Toyota recalled millions of automobiles to fix a potentially hazardous problem known as sudden acceleration. W riting in the Wall Street Journal, James Stewart gave investors the following advice: "Toyota shares ...

Calculating cost of equitythe dybvig corporations common

Calculating Cost of Equity The Dybvig Corporation's common stock has a beta of 1.7. If the risk-free rate is 4.8 percent and the expected return on the market is 10 percent, what is Dybvig's cost of equity capital? (Do n ...

Explain how a swaption can be terminated at expiration by

Explain how a swaption can be terminated at expiration by either exercising it or settling it in cash. Why are these procedures financially equivalent? Explain how the two types of swaptions are like interest rate option ...

Capital investment analysisbramer corporations controller

Capital Investment Analysis Bramer Corporation's controller, Mara, was asked to prepare a capital investment analysis for a robot-guided aluminum window machine. This machine would automate the entire window-casing manuf ...

In early 2009 an article in the new york times

In early 2009, an article in the New York Times observed: "Without a cure for the problem of bad assets, the credit crisis that is dragging down the economy will linger, as banks cannot resume the ample lending needed to ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen