Explore BrainMass


Time value of money

Your brother is 55 years old now and his current savings declined to $500000 and he does not feel this is sufficient ,so he works for another 10 years to retire at age 65.He expects to live for another 20 years after he retires he wants to have $100000 to live on each of the 20 years ,the first payment occuring at the time of re

Time Value of Money Solution set

Using the appropriate interest table, provide the solution to each of the following four questions by computing the unknowns. a) What is the amount of the payments that Tom Brokaw must make at the end of each of 8 years to accumulate a fund of $70,000 by the end of the eight year, if the fund earns 8% interest, compounded ann

Future value of an annuity: streams of payment

What is the accumulated sum of each of the following streams of payments? 1. $500 a year for 10 years compounded annually at 5 percent 2. $100 a year for 5 years compounded annually at 10 percent 3. $35 a year for 7 years compounded annually at 7 percent 4. $25 a year for 3 years compounded annually at 2 percent

Mortgage, Annuity and Return

1. A $20,000 mortgage is to be paid by 180 equal monthly payments, each including some principal along with interest on the outstanding principal, at an effective rate of 3 1/2 per half year. What are the monthly payments? 2. An investor wants to purchase an annuity which will yield an income of $2000 at the end of each year

Compute cost of computer and amount of each payment

Norris is presently leasing a small business computer from Stark office equipment co. the lease requires 10 annual payments of $3,500 at the end of each year and provides the lessor (stark) with an 8% return on its investment. You may use the following 8% interest factor: 9 periods 10 periods

You own a paid up, older car with an estimated remaining life of 3 years. You would like to replace this car with a new one, which you intend to trade in after 3 years. Is this purchase justified given the following information:

Please see attached file. You own a paid up, older car with an estimated remaining life of 3 years. You would like to replace this car with a new one, which you intend to trade in after 3 years. Is this purchase justified given the following information: First cost of OLD CAR zero First cost of NEW CAR $7500 Annual ins

Equivalent Annual Cost

Ambuja University must purchase word processors that cost INR 8,000 each and have annual, year-end maintenance costs of INR 2,000 per machine. The EVF word processors will be replaced at the end of year 4 and have no value at that time. Alternatively, Ambuja can buy 11 AEH word processors to accomplish the same work. The AEH w

Major Help Needed on Tax Questions

A. In 2003, Senate Democrats proposed that all workers receive a one-time tax rebate check of $300 for each adult in a family, and $300 for each of the first two children. The goal of the program was to stimulate the consumer spending. On the basis of the life-cycle model of consumption behavior, would you expect this proposal t


Q1: You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. What will your

Business article, 'Can a Hybrid 401(k) save retirement'. Give your opinion.

See the attachment. Two pages double spaces in current article from business magazine. "Any current topic". (Eg. Forbes, Business Week, Fortune, ect...) (Include APA references of the article you write about). Show your work including Summary, Discussion, and Conclusion. Example 'Can a Hybrid 401(k) Save Retirement?' If you

Financial concepts - Time Value of Money

Problem: Use the future value interest factors in Appendix Table A-1 in each fo the cases shown below to estimate, to the nearest year, how long it would take an initial deposit, assuming no withdrawals. a.To double b.To quadruple Case Interest rate A 7% B 40% C 20% D 10% Pr

Jump start for reviewing

1. The present value of a ten year $100 annual annuity discounted at 12% is: a. $32.19 b. $89.28 c. $565.02 d. $310.58 2. The present value of a single sum of $100 to be received in 10 years and discounted at a annual 12% rate on a semi-annual basis is: a. $32.19 b. $31.18 c. $100 d. $310.58 3. The best way to

Compound and simple interest, PV, annuities, FV, sinking funds

Congratulations! You have been hired by XYZ Advertising. You have been placed on an advertising team with your first big client, a local financial institution; however, you are somewhat nervous to join the advertising team as your financial knowledge and background are somewhat limited. Thus, before putting together an ad campai

Present Value of a stream of cash flows

Find the present value of the following stream of cash flows assuming that the firm's cost is 14% and that these amounts are received at the end of each year. Year Amount 1 - 5 $20,000/year 6 - 10 $35,000/year

Finance: 25 Problems and Questions, TF, MC,

See attached file. True/False 1. In limited liability partnerships, the liability protection does not protect partners from their individual acts of malpractice. 2. Unlike an S corporation, the limited liability corporation (LLC) can own more than 80 percent of another corporation, and corporations, partnerships, or

Calculating Present Values of future cash flows.

I) Use Excel to perform the following calculations. Label each input and the output of your calculations. Highlight your final answer using the yellow highlighter on the top right menu bar. Assume for each part that the interest rate is 8% per year. (1) What is the present value of $8000 to be received in five years? (2) W

Prepare a 1040 (including schedules A, B, D and Form 3903) - Donna Harp Scenario

Please see the attached PDF and assist with final preparation of the 1040 including schedules A, B and D and Form 3903. Please give step by step instructions as to where each transaction is applied in the process of preparing the returns so that I have a better clarification. Also please demonstrate the calculations on the gai

Step-wise answer to Present Value

1. Present value calculations. Using a present value table, your calculator, or a computer program present value function, answer the following questions: a. What is the present value of nine annual cash payments of $4,000, to be paid at the end of each year using an interest rate of 6%? b. What is the present value of $15,000

Your Firm is Considering Leasing a New Computer

14) Your firm is considering leasing a new computer. The lease lasts for 9 years. The lease calls for 10 payments of $1,000 per year with the first payment occurring immediately. The computer would cost $7,650 to buy and would be straight-line depreciated to a zero salvage over 9 years. The actual salvage value is negligib

Present Value, Purchases, Interest Rate and Journal Entries

Help with solving these review questions that are similar to the final exam. Need to show steps please so that I can familiarize myself. Thanks!!! 1a Johnson Company is contemplating the purchase of a machine that provides it with net after-tax cash savings of $80,000 per year for 5 years. Interest is 8%. Assume the cash sav

Compound Interest and Payments

1.What's the future value of $2,000 after 3 years if the appropriate interest rate is 8%, compounded monthly? 2.Suppose you borrowed $25,000 at a rate of 8% and must repay it in 4 equal installments at the end of each of the next 4 years. How large would your payments be? 3. You are buying your first house for $220,000, a

Funding Your Retirement

Funding your retirement. You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year durin

Time Value of Money

PLEASE SEE ATTACHMENT THANKS I NEED HELP WITH THE ANNUITY PAYMENT (HIGHLIGHTED IN YELLOW) WHICH HAS TO BE POSITIVE AND NOT NEGATIVE. Directly below these instructions is a blank table to compute PV factors. Using cell formulas or functions, calculate the PV for the years and interest rates given. Remember, only

Determine initial balance

If I was going to withdraw 5000.00 at the end of each year for the next four years from an account that pays an interest at a rate of 9% compounded annually. How much must there be in the account today in order for the account to reduce to a balance of zero after the last withdrawal. How much total interest would you earn?

Finance formula for monthly installments

Write down the formula for determining how much money was borrowed and how to calculate it. If I have the following example : monthly payment is 821.69 for 30 years at 6.5%.

Alexis Mantle 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

1. Alexis Mantle 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, or (3) a six-period annuity of $13,000 beginning one year from today. Assuming an interest rate of

Time value of money

John is saving for his retirement. Today is his 40th birthday. John first started saving when he was 25 years old/ on his 25th birthday; John made the first contribution to his retirement account; he deposited $2,000 into an account which paid 9 percent interest, compounded monthly. Each year on his birthday, John contributes an