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You expect to inherit 75,000 dollars 8 years from now. If r = 2 percent, find the PV.
Group of answer choices
64,300.41
64,011.78
87,874.45
To help pay for your grandchild's college tuition, you invest 10,000 dollars today. If your expected return is 10 percent, how much will you have in 20 years?
Group of answer choices
61,917.36
67,275.00
1,486.44
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Solved in 3 steps
- You would like to retire in 50 years, as a millionaire. If you have $20 000 today what rate of return do you need to earn to achieve your goal? Select one: a. 8.41% b. 8.14% c. Cannot be calculated d. 8.00%QUESTION ONEYou estimate that you will need about K80,000 to send your child to college in eight years. Youhave about K35,000 now. If you can earn 20 percent per year, will you make it? At what rate willyou just reach your goal? (Would you be willing to pay K1,163 today in exchange for K10,000 in 30 years? What would bethe key considerations in answering yes or no? Would your answer depend on who is making thepromise to repay? You have just made your first K2,000 contribution to your individual retirement account.Assuming you earn a 12 percent rate of return and make no additional contributions, what willyour account be worth when you retire in 45 years? What if you wait 10 years before contributing?(Does this suggest an investment strategy?) If you were an athlete negotiating a contract, would you want a big signing bonus payableimmediately and smaller payments in the future, or vice-versa? How about looking at it from theteam’s perspective?Assume that you just inherited an annuity that will pay you $10,000 per year for10 years, with the first payment being made today. A friend of your mother offersto give you $60,000 for the annuity. If you sell it, what rate of return would yourmother’s friend earn on his investment? If you think a “fair” return would be 6%, howmuch should you ask for the annuity? (13.70%, $78,016.92)
- You would like to retire in 50 years, as a millionaire. If you have $20 000 today what rate of return do you need to earn to achieve your goal? Select one: a. 8.00% b. Cannot be calculated c. 8.14% d. 8.41%Suppose you deposited $39,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year. How much would be in the account after 8 months, assuming each month has 30 days? Select the correct answer. O a. $40,389.07 O b. $40,375.67 O c. $40,402.47 d. $40,368.97 Oe. $40,382.37Your friend offers you an investment opportunity that would yield $100 per year for the next 3 years. Using a discount rate of 10%, decide whether this is a good investment opportunity. What is the present value of this investment? a. $200.05 b. $250 c. $248.68 d. 258.20
- Assume that you just inherited an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. A friend of your mother offers to give you $60,000 for the annuity. If you sell it, what rate of return would your mother’s friend earn on his investment? If you think a “fair” return would be 6%, how much should you ask for the annuity? What keys do I need to enter in a financial calculator to get the answers of (13.70%, $78,016.92)/ only show me the keys to enter in a financial calculaotr. not excel and not algebraYour investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years. If you require a 7% return, what is the most you should pay for this investment? Group of answer choices $201,000 $175,590 $225,682 $ 49,179 $250,000You calculate that you will need $75,000 in ten years to be able to pay for your daughter's college education. If you invest $20,000 today, what rate of return will you need to achieve this goal? Select one: A. Between 12% and 13% B. Between 13% and 14% C. Between 14% and 15% D. Between 15% and 16%
- Suppose you are offered an investment that will allow you to double your money in 8 years. You have R10 000 to invest. What is the implied rate of interest?Suppose you have a 1-year old daughter and you want to provide R81 000 in 19 years towards her college education. You currently have R2 000 to invest. What interest rate must you earn to have the R81 000 when you need it?Suppose you want to buy a new house. You currently have R15 000 and you figure you need to have a 10% down payment plus an additional 5% of the loan amount in closing costs. If the type of house you want costs about R150 000 and you can earn 8.1% per year, how long will it be before you have enough money for the down payment and closing costs?Assume that you just inherited an annuity that Will pay you 10,000 per year, with the first payment being made today. A friend mother offers you 60,000 for the annuity. If you sell it, what rate of return would your mother's friend earn on his investment? If you think a fair return would be 6% how much should you ask for the annuityYour uncle Barry is about to retire, and he wants to buy an annuity that will provide him with $77,000 of income a year for 25 years, with the first paying coming immediately and future payments occurring at the BEGINNING of the respective years. The interest rate on this annuity is 8.50%. How much would it cost him to buy the annuity today? (Ch. 5) Group of answer choices $957,617.32 $820,814.85 $855,015.47 $786,614.23 $788,032.69
