Assumptions: 1. Your required rate of return until retirement is 8% 2. Your retirement payout will be a fixed payment, and will be adjusted for a much more conservative return of 5%. This will be your return on the payout until you die. Process: Using the time value of money, you will need to calculate how much you
See the attached file. Please provide the answer in a word document. Provide the answer in detail. Clearly state all the calculations and figures in the word document. You can also write the calculations and scan.
1. Simple Interest versus Compound Interest - First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made $5,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years
After graduation, you plan to work for Mega Corporation for 10 years and then start your own business. You expect to save $5,000 a year for the first 5 years and $10,000 annually for the following 5 years, with the first deposit being made a year from today. In addition, your grandfather just gave you a $10,000 graduation gift
The following retirement problem is often used to illustrate important aspects of savings and compound interest - see what you can learn by working the problem. Pat and Chris are both recent MBA graduates and are each 25 years old. They both plan on retiring when they are 65 years old. Pat has decided to put $5,000 into an
30. You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 30th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a saving account. If the inte
1. Calculate the future value of $2000 in a) 5 years at an interest rate of 5% per year. b) 10 years at an interest rate of 5% per year. c) 5 years at an interest rate of 10% per year. d) Why is the amount of interest earned in pat (a) less than half the amount of interest earned in part (b)? 2. You are thinking of r
1) Calculate the future value of $2000 in a) 5 years at interest rate of 5% per year b) 10 years at an interest rate of 5% per year c) 5 years at an interest rate of 10% per year d) why is the amount of interest earned in part (a) less than half the amount of interest earned in (b) 2) You are thinking of retiring. Your
Problem 1 chapter 4 You have just taken out a five-year loan from a bank to buy an engagement ring. The ring costs $5000.You plan to put down $1000 and borrow $4000. You will need to make annual payments of $1000 at the end of each year. Show the timeline of the loan from your prospective. How much would the timeline differ if
Your parents are giving you $500 a month for five years while you attend college to earn both a bachelor's and a master's degree. At a 7 percent discount rate, what are these payments worth to you when you first enter college? Please 1) solve by hand (please show formula) and (2) provide financial calculator inputs and che
Need help with the following problems. I would like see how to solve each problem with a formula and what inputs you would use when using a financial calculator. 1. Your parents are giving you $500 a month for five years while you attend college to earn both a bachelor's and a master's degree. At a 7 percent discount rate, w
You have just received a windfall from an investment you made in a friend's business. He will be paying you $10,000 at the end of this year, $20,000 at the end of the following year, and $30,000 at the end of the year after that (three years from today). The interest rate is 3.5% per year. a. What is the present value of
There are 3 parts to this; part of this has been completed 1. Present value calculation 2. Future value of annuity: ordinary annuity and annuity due 3. Loan interest deductions 1. Present value calculation: A PVIF  1  (1  0.02)4  ?? B PVIF  1  (1  0.10)2 
Future value tables Use the future value interest factors in Appendix Table A-1 in each of the cases shown in the table on the facing page 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
A client is given a trust fund worth $1,000,000.00. He can't access any money until he turns 65, which is in 25 years. At that time, he can withdraw $25,000 per month. If the trust fund is invested at a 5.5% rate, how many months will it last him once he starts withdrawing the money (until there is none left)?
Can you help? I'm stuck on a few True/False questions... Chapter 1 1. A financial analyst is responsible for maintaining and controlling the firm's daily cash balances. Frequently manages the firm's short-term investments and coordinates short-term borrowing and banking relationships. 2. Finance is concerned
Let's say that the Fed decides to focus on the creating jobs in the economy. It will do this by increasing the money supply. What actions can the Fed take to increase the money supply?
Sheila and Ed have approached you with their problems as highlighted situations 1-5. Situation #1 Sheila and Ed have $150,000 cash to invest with a bank offering a 4% interest rate. They are not sure whether to invest the cash with interest rate compounded quarterly, semi-annually, or annually. Calculate the balance at th
Can you help with this?? 1. In two to three paragraphs, explain why the concept of present value is so important for corporate finance and is often the very first topic taught in any finance class. 2. Calculate the future value of the following: a. $500 if invested for five years at a 4% interest rate b. $150 if in
Please see the attached file. 1. I am getting ready to buy a new car. I plan on spending $35,000 for the car and I believe my current car has a $17,000 trade-in value and I make no additional downpayment. I keep my vehicles 5 years but would like a three-year loan. What will my monthly car payment be at the end of each
1. 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 dur
Jean Splicing will receive $8,500 a year for the next 15 years from her trust. If a 7 percent interest rate is applied, what is the current value of the future payments
Apply the concept of present value to Safeway, Inc. Suppose Safeway,Inc is selling a bond that will pay you $1000 in one year from today. Keep in mind that if your company has financial difficulties in one year you might not get your full $1000 back. Given that a dollar one year from now is always worth less than a dollar tod
Apply the concept of present value to Second Life. Suppose Second Life is selling a bond that will pay you $1000 in one year from today. Keep in mind that if Seconbd Life has financial difficulties in one year you might not get your full $1000 back. Given that a dollar one year from now is always worth less than a dollar toda
1. The terms of a loan indicate how often interest is compounded. () True False 2. To compound daily means to compound 360 times a year. () True False 3. The number of compounding periods for $6,600.00 at 12% compounded quarterly for 15 years is 30 periods. () True Fals
See the attached file.
Explain the concept of the time value of money. You will need to include and define/explain the concepts of "future value", annuities, present value, cash flows, compound interest and opportunity cost in your answer
A recent article at MSN was "Droid Versus Pre Versus iPhone: A Cost of Ownership Reality Check: Which of these three hot handsets will cost you the most over two years?" By Ian Paul, PC World. (It can be found at the following although it is not needed for this question as the data is listed below.) http://tech.msn.com/pr
52. Bank One loans ABC Corporation $50,000 to buy a piece of equipment. Bank One accepts a note due in 2 years with interest at 12% compounded monthly. How much cash does Bank One expect to receive when the note is paid at maturity? 53. Neal Carter wants to establish a retirement fund for him and his wife. They want to
Jamison Inc. shows the following information on its 2009 income statement: sales= $196,000, costs=$104,000, other expenses= $6,800, depreciation expense = $9,100, interest expense = $14,800, taxes= $21,455, dividends = $10,400. In addition, you are told that the firm issued $5,700 in new equity during 2009 and redeemed $7,300 i