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    Compare options of lump sum with annuity payments for life

    Your son has discovered that he can throw a fastball at 114 mph. The Yankees have offered him his choice of $500 million one time signing bonus with no additional payments or a guaranteed $18 million annual salary for the rest of his life. Assuming his required return is 12%, at what age would he become indifferent to which

    Reaching my financial goal with annual deposits: FV of annuity

    I plan on depositing 5,000 at the end of ever year with an expected return on the account being 9.8%, how long will it take me to reach $1 million in my account? Now what if I only deposited 4,000, what is my expected return on the account to have $1 million in my account. 16. Mattel needed to act quickly when they learned

    The annuity value of additional payments, PV, payment amounts

    I just bought a 10 year ordinary annuity that promises to pay 1,500 at the end of each next 10 years. If the appropriate interest rate for this annuity is 7.8% what is the present value of this annuity? If I want to extend my annuity another ten years, if I pay more money today, I can continue to receive $1,500 per year for

    Finance: Computing the Present Value of an Annuity

    Which of the following 10 year annuities has the greatest present value? Assume all the annuities have the same interest rate. An annuity that pays $1,000 at the end of each year? An annuity that pays $500 at the beginning of every six months? An annuity that pays $1,000 at the beginning of each year? An annuity that

    Future Values of Annuity Streams

    Calculate the future value of the following annuity streams: a. $5,000 received each year for 5 years on the last day of each year if your investments pay 6 percent compounded annually. b. $5,000 received each quarter for 5 years on the last day of each quarter if your investments pay 6 percent compounded quarterly. c.

    Accountants to have an understanding of compound interest

    Examine the concept of time value of money. Analyze why it is important for accountants to have an understanding of compound interest, annuities, and present value concepts. Examine at least three situations in which accounting measures are based on present values. Determine if these present value applications invo

    Calculating the fair value of given annuity

    You have a chance to buy an annuity that pays $5,000 at the beginning of each year for 5 years. You could earn 4.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? a. $20,701 b. $21,791 c. $22,938 d. $24,085 e. $25,289

    HIGH DESERT GOLF CLUB: Purchase of golfcarts, amortization schedule, lease v buy

    HIGH DESERT GOLF CLUB High Desert Golf Club (HDGC), located in Rifle, Colorado, was a public golf course, owned by a private corporation. In January the club's manager, Lee Jeffries, was faced with a decision involving replacement of the club's fleet of 40 battery-powered golf carts. The old carts had been purchased five y

    Compounded value of annuity advice

    Your client is 45 years old, and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $9,000 per year, and you advise her to invest it in securities which you expect to provide an average annual return of 10 percent. If she follows your advice, how much money would she have a

    Time Value of Money and Present Value Problems

    (1) Based on the current interest rate environment, are there specific maturities you'd favor? What about floating rate bonds in the current interest rate environment...what are your thoughts with regard to those? Lastly...there are treasury bonds called TIPS...explain what they are and what advantages and/or disadvantages you s

    Present value of annuity.

    What is the maximum amount you would pay for an asset that generates an income of $150,000 at the end of each of five years if the opportunity cost using funds of 9%? Explain the concept and the calculations.

    Monetary Terms to the Relationship

    Kevin has found the woman of his dreams and will marry soon. He has a bright financial future and quite impressed with what he will bring in monetary terms to the relationship. He's presently gainfully employed and expects that his earnings power will increase substantially after he gains more work experience and completes bu

    Annuity problem

    Which of the following cash flows is equivalent to receiving $125.00 today assuming a 9% annual discount rate? $192.33 five years from today $229.87 seven year from today $163.12 three years from today $312.67 ten years from today

    Which option for lottery win; Weimer Corp fund to repay debts

    Answer each of the following independent questions 1. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes. (1) 64,000 cash immediately, (2) $20,000 cash immediately and six-period annuity of $8,000 beginning one year from today, (3) a six period annuity of $8,000 beginnin

    Wiseman Video Future Value of an Annuity

    Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Using the appropriate annuity table, determine how much will be accumulated in the fund on December 31, 2014, under each o

    Payoff for a 30 year mortgage with years remaining in Excel.

    See attached file. What is the payoff on a 30 year, 6% morgage of $255,413 with a payment of $1,531.33 with 7 years remaining. I would like to know if there is a way to calculate this in Excel without creating a long amitorization schedule for 30 years. I can't seem to get a formula to work. I will attach the rest of the a

    Life Insurance Types

    1. Define the various types of life insurance. 2. How are premiums and dividends taxed? How are death benefits taxed?

    Finding the Annual Interest Rate on a Car Loan

    (Rate of return of an annuity) Paul's Perfect Peugeot says they'll sell you a brand new Italian's Iron Man motor scooter for $1699. Financing is available, and the terms are 10% down and payments of $46.57 a month for 40 months. What annual interest rate is Paul charging you?

    Retirement Planning

    Creative Games Corp has a contributory retirement plan in which 5% of the employees' annual wages is deducted to meet the cost of the benefits. The firm contributes an amount equal to the employee contribution. The plan uses a 5-year graded vesting procedure; it has a normal retirement age of 60 for all employees, and the bene

    Retirement Planning for Elena

    Elena Diaz is 57 years old and has been widowed for 13 years. Never remarried, she has worked full-time since her husband died - in addition to raising her two children, the youngest of whom is now finishing college. After being forced back to work in her 40s, Elena's first job was in a fast-food restaurant. Eventually, she updg


    17. Calculate the present value of an annual payment of $3,000 per year for ten years at 8% (ordinary annuity) 18. How much will you have at the end of the 6th year if you invest $5,000 annually for six years at 7% annual rate, if you start one year from today?

    Description of Present Value Calculations

    Calculate the present value for the following questions: 1. $45,000 today in one lump sum. 2. $70,000 paid to you in seven equal payments of $10,000 at the end of each of the next seven years. 3. $80,000 paid in one lump sum 7 years from now

    PV FV Monthly Compounding

    1. Suppose the interest rate is 7% APR with monthly compounding. What is the present value of an annuity that pays $80 every 3 months for 4 years? The present value of the annuity is $ (round to two decimal places) 2. If you deposit $1 into a bank account that pays 0.5% per month for three years, the amount you will

    Investments: 4 problems using TVM concepts

    See attached file. 10. Susan Robinson's retirement fund of $600,000 13. Net Present Value of two investment opportunities 14. Withdrawal amounts for great uncle Claude's savings 24. Annual withdrawals of future value of 25 deposits of $4500 for 25 years