Finance: Annuity, present value etc,
Not what you're looking for?
Sonia Gomez, a 45-year-old widow, wishes to accumulate 4250,000 over the next 15 years to supplement the retirement programs that are being funded by the federal government and her employer. She expects to earn an average annual return of about 8% by investing in a low-risk portfolio containing about 20% short -term securities, 30% common stock, and 50% bonds.
Sonia currently has 431,500 that at an 8% annual rate of return will grow to about $100,000 at the end of 15 years (found using time-value techniques that will be described in Chapter 4 Appendix). He financial adviser indicated that for every $1,000 Sonia wishes to accumulate at the end of the 15 years, when will have to make an annual investment of $36.38. (This amount is also calculated on the basis of an 8% annual rate of return using the time-value techniques that are described in the Chapter 4 Appendix). Sonia plans to accumulate needed fund by making equal, annual, end-or year investments over the next 15 years.
A) How much money does Sonia need to accumulate by making equal, annual, end-of-year investments to reach her goal of $250,000?
A) How much must Sonia deposit annually to accumulate at the end of year 15 the sum calculated in part a?
Purchase this Solution
Solution Summary
The problem set deals with issues in finance including: Annuities, present value etc
Education
- B. Sc., University of Nigeria
- M. Sc., London South Bank University
Recent Feedback
- "Thank you."
- "thank you Chidi Ngene.. if you have any APA references would be great"
- "Thank you so much for your help, your explanations were easy to understand and apply!"
- "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
- "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce