a. If she invest it at 8% compounded annually and takes nothing out, how much will she have at the end of 20 years?

b. If she take out $50,000 to but a car and invest the remainder at 8% compounded annually and takes nothing else out, how much will she have at the end of 20 years?

c. If she invest it at 8% compounded annually and takes out $75,000 today and $70,000 at the end of every year thereafter. How much will she have at the end of 20 years?

d. If she invest it at 8% compounded annually and takes out $75,000 today and $70,000 at the end of every year thereafter, when will she get the last payment?

e. What rate of interest would she need to take out $75,000 today and $70,000 at the end of every year for 20 years?

Please refer attached file for clarity of formulas in MS Excel format.

a. If she invest it at 8% compounded annually and takes nothing out, how much will she have at the end of 20 years?

Inherited amount=T=$750,000
Used amount=U=0
Balance=PV=T-U=$750,000
Annual withdrawl=PMT=0
Rate of interest=RATE=8%
Number of periods=NPER=20
Type of payment=TYPE=0 End of period with drawls
Future Value=FV=?

We can use FV function in MS Excel to get the value at the end of 20 years

b. If she take out $50,000 to but a car and invest the remainder at 8% compounded annually and takes nothing else out, how much will she have at the end of 20 ...

Solution Summary

Solution calculates the future values in the given cases with the help of functions in MS Excel.

Calculating Future Value of ordinary annuity and annuity due. ... a. Calculate the future value of the annuity assuming that it is (1) An ordinary annuity. ...

... the preprogrammed function on your financial calculator, use the ... the number of periods, n, to calculate the future... Compare the calculated value to the value in ...

Time Value of Money Concepts. Problem 4.4. For each of the cases shown in the following table, calculate the future value of single cash flow deposited ...

... d) In all the three cases we are calculating present worth ... Solution to each problem discusses the steps to calculate present worth of future cash flows ...

... For calculating Future Value of any deposit we use following ... the number of periods, n, to calculate the present ... Compare the calculated value to the table value...

Solving Present Value and Future Value Problems. ... Thus, if you don't understand how to calculate the present ...Calculate the present value of the following lump ...

... b. Use Equation 12.12 and the earnings per share calculated in part a to calculate a price per ... Justify your choice. Solutions: P43 Future value tables. ...

... of assets, if the value in use is calculated by not ... cash flows should be used in calculating the value in ... which the organization will realize in future, has no ...

...value of each investment and shows how to calculate the semi ... step is to compute the future value of the ... Use either a financial calculator or EXCEL command [= -FV ...