A downtown bank promises its potential employees a $ 5000 sign-on bonus, an additional bonus of $ 11000 two years from now, an additional bonus of $ 17000 four years from now, and an additional bonus of $ 24000 six years from now. Lavanya was hired today but only intends to work for this bank for one year. What is the present value of this bonus payment structure to her? (Assume that money is worth 8% p.a. compounded quarterly) O a. $ 4439.85 O b. $ 4869.73 O c. $ 4619.23 O d. $ 4101.74 O e. $ 5000.00
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- A downtown bank promises its potential employees a $9000 sign-on bonus, an additional bonus of $ 13000 two years from now, an additional bonus of $ 16000 four years from now, and an additional bonus of $ 21000 six years from now. Lavanya was hired today but only intends to work for this bank for three years. What is the present value of this bonus payment structure to her? (Assume that money is worth 8% p.a. compounded quarterly) O a. $18235.66 O b. $ 20235.80 O c. $19411.07 O d. $ 20095.37 O e. $ 20449.97A downtown bank promises its potential employees a $ 8000 sign-on bonus, an additional bonus of $ 12000 two years from now, an additional bonus of $ 19000 four years from now, and an additional bonus of $ 23000 six years from now. Lavanya was hired today but only intends to work for this bank for three years. What is the present value of this bonus payment structure to her? (Assume that money is worth 8% p.a. compounded quarterly)Your friend offers to pay you an annuity of $2,500 at the end of each year for 10 years in return for cash today. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? Please show your work in excel
- An aunt gifts you with $12,000, but only after you invest it for one year. She givesyou two choices.1. Invest the entire sum at 4.2% compounded monthly.2. Invest $1000 at 7.1% each month in an annuity that pays every month.(a) What is the future value of the money invested with method 1?(b) How much interest is earned with method 1?(c) What is the future value of the money invested with method 2?(d) How much interest is earned with method 2?(e) Which method would you choose?1. You deposit GHS10,000 today into an account paying 6% annual interest and leave it on deposit for exactly eight years. Required: How much will be the amount in the account at the end of eight years if interest is compounded annually? 2. Imagine you are a professional personal finance planner. One of your clients ask you the following question. Use time value of money technique to develop appropriate responses in each question. I borrowed GHS75,000, am required to repay it in six equal (annual) end of year instalments of GHS3,344 and want to know what interest rate I am paying.A new employee plans to receive 760,000 TL individual retirement bonus when he retires. According to the forecast that this person will retire after 30 years, premium payments will be made at the end of each year and a compound interest rate of 14% will be applied each year; a) What is the premium amount to be deposited at the end of each year b) Draw the cash flow diagram for the transactions. c) Calculate the present value of the 760,000 TL bonus that this person will receive when she retires.
- Through your career, you have saved-up $1,150,000. You are now ready to retire. You discuss your plans with your bank's financial adviser. He informs you that you can establish an annuity that will pay $68,000 per year for 25 years. What is the implied rate the bank is offering? O 3.58% ○ 2.75% O 3.26% ○ 3.40%A new employee plans to receive 760,000 TL individual retirement bonus when he retires. According to the forecast that this person will retire after 30 years, premium payments will be made at the end of each year and a compound interest rate of 14% will be applied each year; a) What is the premium amount to be deposited at the end of each year b) Draw the cash flow diagram for the transactions. (10 puan). c) Calculate the present value of the 760,000 TL bonus that this person will receive when she retires.A man can sell his business for $800,000 cash or for $125,000 plus $12'I a. Find the present value of the annuity that is offered if money is worth 10%; compounded annually. b. If he takes the $800,000, spends $125,000 of it, and invests the rest in a 9-year annuity at 10%, compounded annually, what size annuity payment will he receive at the end of each year? c. Which is better, taking the $125,000 and the annuity or taking the cash settlement? a. Find the present value of the annuity that is offered if money is worth 10%, compounded annually. (Type an integer or decimal rounded to the nearest cent as needed.)
- Solve the following: 2. In purchasing of house, a man makes P720,000 down payment and agrees to pay P1,200,000 5 years later. Find the cash value of the house if money is worth 14% compounded semi-annually. 3. How much must a corporation deposit in a bank which credits interest at 12% compounded monthly to come up in 8 years with P2,500,000 needed for its expansion program? 4. On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded quarterly. How much must he invest if he wants to accumulate P650,000 by the time the child reaches his 21st birthday? 5. To provide for a purchase of a car worth P950,000 as a gift to his mother 5 years from now. How much should Benjamin invest today at 18% compounded quarterly? 6. Mrs. Dela Cruz invested P70,000 at 12% compounded quarterly for 5 years and another P70,000 at 18% compounded semi-annually for the same length of time. Find the total amount of the two investments. 7. Four friends deposited…Suppose that you are obtaining a personal loan from your uncle in the amount of $20,000 (now) to be repaid in two years to cover some of your college expenses. If your uncle usually earns minimum 8% profit (annually) on his money, which is invested in various sources, what minimum lump-sum payment two years from now would make your uncle happy?It is estimated that you will pay about $80,000 into the Social Security system (FICA) over your 40-year work span. For simplicity, assume this is an annuity of $2,000 per year, starting with your 26th birthday and continuing through your 65th birthday. Solve, a. What is the future equivalent worth of your Social Security savings when you retire at age 65 if the government’s interest rate is 6% per year? b. What annual withdrawal can you make if you expect to live 20 years in retirement? Let i= 6% per year.