Explore BrainMass

# Annuity

### What is the most that I can withdraw annually?

In order to get through college, my parents just deposited \$25,000 into a bank account paying 8% interest. Starting next year, I plan to withdraw equal amounts from the account at the end of each of the next four years. What is the most that I can withdraw annually?

### Let's say I just won the lottery.

Let's say I just won the lottery. What is the future value in 10 years of \$1,000 payments received at the beginning of each year for the next 10 years? Assume an interest rate of 5.625%.

### Calculating annual payments

Leases R Us, Inc. (LRU) has been contracted by Robotics of Beverly Hills (RBH) to provide lease financing for a machine that would assist in automating a large part of their current assembly line. Annual lease payments will start at the beginning of each year. The purchase price of this machine is \$250,000, and it will be leased

### Financial assignment, some multiple choice questions.

Please see attached file. All things being equal, a longer term bond ( say 20 yrs) carries a bigger risk than a shorter term bond . TRUE What type of derivative contract would a corporation use to covert fixed interest payments to floating rate interest payments ? You want to purchase ATT Preferred Stoc

### Value of the Money: Non-Current Liabilities

XYZ company has a balloon payment coming due from a recent acquisition. They need to have \$150,000 set aside 5 years from now. They can either make payments into the fund at the beginning of the year or at the end of the year. The current discount rate is 6%. What TVM concept (s) is represented in the situation? What is the

### Calculating payments

I would like to see how to solve the following and the formulas used: A company wants to borrow \$200,000 from a bank and repay in five equal annual end-of-year payments, including interest. If the bank wants to earn a 10% rate of return on the loan, what should the payment be? Ignore taxes and default risk.

### Trust Word Problem

Dr. Harold Wolf of Medical Research Corporation (MRC) was thrilled with the response he had received from drug companies for his latest discovery, a unique electronic stimulator that reduces the pain from arthritis. The process had yet to pass rigorous Federal Drug Administration (FDA) testing and was still in the early stages o

### Present Value of a Bond

You are contemplating the purchase of a 20-year bond that pays \$50 in interest each six months. You plan to hold this bond for only 10 years, at which time you will sell it in the market place. You require a 12 percent annual return, but you believe the market will require only an 8 percent return when you sell the bond 10 yea

### Financial Analysis

1. A bond is selling for 95% of par and has an annual coupon rate of 6% and will mature in five years. There are semi-annual coupon payments. Calculate the yield-to-maturity. 2. How much money will William have in five years if he places \$2500 into a CD earning an annual interest rate of 7.5% compounded annually? 3.

### Loans, Yield to Maturity

Please use the excel PMT Function 21 Loan Payments. If we take out an \$8,000 car loan that calls for 48 monthly payments at an APR of 10 percent, what is your monthly payment? What is the effective annual interest rate on the loan. 36 Amortizing Loan. we take out a 30-year \$100,000 mortgage loan with an APR of 6 percent

### Annuity for a Future Value

Your two children go to college in the future. First goes to college in 10 years from now, and will require \$20,000 each year for the four years of college. Second child goes to college 15 years from now, and will need \$24,000 each year for the four years of college. You wish to make equal, end of year payments between now and t

### Annuity, Linear programming problem

3. A man has amassed \$1.5 million for his retirement. It is an account earning interest at an annual rate of 7.32%, with monthly compounding. He decides to pay himself equal amounts at the end of every month for 20 years, depleting the entire original amount. How much is each monthly payment? 6. A nutritionist is planning eve

### Bonds- Sinking Funds

Problem 1: Gordon company issued \$1,000,000 10 year bonds and agreed to make annual sinking fund deposits of \$80,000.00. the deposit are made at the end of each year into an account paying 5% annual intrest. What amount will be in the sinking fund at the end of 10 years? Problem 2: Galway Bay Enterprises issued 10%,8 year,

Please aide me in creating a mock test for my study group Question 1 5 points Save The primary difference between "Financial Accounting" and "Managerial Accounting" is that Managerial Accounting gives an historical perspective. True False Question 2 5 points Save Accounting

### Business Finance - Time Value of Money Problem

Mr. Paul "Plan Ahead" Parker has come to you for some retirement planning advice. As a recent college graduate he knows the value of planning ahead (thus his nickname). He wants to know how much he should start putting aside each year so that he will have a sufficient nest egg with which to retire at the age of 65 (40 years away

### Problem Set

(See attached file for full problem description) --- For each of the following cases, indicate (1) to what interest rate columns and (2) to what number of periods you would refer in looking up the future value factor. 1. In Table 1 ( Future value of 1): Annual Number of Rat

### Payments/Compounding/Yield/Annuity

1) You need \$28,974 at the end of 10 years, and your only investment outlet is an 8 percent long term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. a) What single payment could be made at the beginning of the first year to ac

### Computation of Lump Sum to Invest Now

1) You are considering partial retirement. To do so you need to use part of your savings to supplement your income for the next five years. Suppose you need an extra \$15,000 per year. What lump sum do you have to invest now to supplement your income for five years? Assume that your minumum desired rate of return is 16% compound

### 3 Problems

Be detail as possible and show all work. 2. What is the present value of \$200,000 received at the end of every 6 month for the next 8 years at a discount rate of 7%? 5. Find MNO's Weighted Average Cost of capital given the following information: Tax Bracket: 30%

### Jay Williams is 35 years old today...

Jay Williams is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each month for the next 25 years so that he can retire at age 60. He expects to live to an age of 80 and wants to be able to withdraw \$50,000 per year from the account on his sixty-first through eig

### Future Value Annuity

Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of \$180,000 and her life expectancy is 15 more years. Her pension fund manager assumes he can earn a 9 percent return on her assets. what will be her yearly annuity for the next 15years. Please show th

### Opportunity Costs and Deferred Annuity

Question: Les Moore retired as president of Goodman Snack Foods Company, but is currently on a consulting contract for \$35,000 per year for the next 10 years. a. If Mr. Moore's opportunity cost (potential return) is 10 percent, what is the present value of his consulting contract? b. Assuming Mr. Moore will not retire for

### Investment, Bond Face Value, NPV Calculations and WACC

1. Janice Smith wishes to accumulate \$8,000 by the end of 5 years by making equal annual end-of-year deposits over the next five years. If Janice can earn 7 percent on her investments, how much must she deposit at the end of each year to meet this goal? 2. J& J just issued a bond with a \$1,000 face value and a coupon

### IMPROPER QUESTIONS OR THINGS

In the company you chose to study, there are likely some kind of informational privacy issues. Get a copy of the employment agreement you signed when you took the job or if you are looking at another company you do not work for, find a copy of an employment agreement for that company. 1. DOES THE COMPANY ASK ANYTHING THAT

### Leases R Us, Inc Problem-Calculating Annual Payments.

Leases R Us, Inc. (LRU) has been contracted by Robotics of Beverly Hills (RBH) to provide lease financing for a machine that would assist in automating a large part of their current assembly line. Annual lease payments will start at the beginning of each year. The purchase price of this machine is \$250,000, and it will be leased

### PV Lease Problem (Use excel pls)

Annual lease payments will start at the beginning of each year. The purchase price of this machine is \$200,000, and it will be leased for a period of 5 years. Utilizing straight line depreciation of \$40,000 per year with a zero book salvage value. However, salvage value is estimated to actually be \$35,000 at the end of 5 years.

### Present Value & Interest Rates

What is an example of the "present value" concept? How does a single cash flow present value example differ from an annuity calculation? What is the relationship between interest rates and bond prices

### Problem Set

10.2 Suppose you have invested only in two stocks, A and B.The returns on the two stocks de¬pend on the following three states of the economy, which are equally likely to happen: State of probability of return on Economy state occurring Stock B (%) Bear 6.30

### You just won the lottery. You and your heirs will receive \$25,000 per year forever, beginning one year from now.

I need help in understanding these, if you can explain, how you came to your answer. a. You just won the lottery. You and your heirs will receive \$25,000 per year forever, beginning one year from now. What is the present value of your winnings at an 8% discount rate? b. You are supposed to receive \$2,000 five years from now

### Managerial Finance

Babe Ruth Jr. has agreed to play for the Cleveland Indians for \$3 million per year the next ten years. What table would you use to calculate the value of this contract in today's dollars? A)Present value of an annuity, B)Present value of a single amount, C)Future value of an annuity, D)None of the above