Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year...
Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year free of teaching and other administrative responsibilities at full pay. For a professor earning $ 75,000 per year who works for a total of 42 years, what is the present value of the amount she will earn while on sabbatical if the interest rate is 7 % (EAR)? Note: Assume that the sabbatical annual salary is paid in one lump sum every 7 years. Find: Equivalent discount rate:(round to 3 decimals) The present value of the amount she will earn on sabbatical is:(round to nearest dollar)
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Many academic institutions offer a sabbatical policy. Every
seventh year a professor is given a year...
GENERAL ANNUITY Instruction: Solve the given situations. Show your solutions (5 points each). 1. Soledad decides...
GENERAL ANNUITY Instruction: Solve the given situations. Show your solutions (5 points each). 1. Soledad decides to save P2,700 at the end of every 6 months, which is the amount paid into her retirement plan by the company where she works. If she chooses an investment fund that guarantees 8% per year compounded quarterly, how much will she have in 10 years? 2. What is the present value of an annuity of P7,300 per semi-annual period for 7 years at...
Jane Smith wants to send her son Billy to college. Billy just turned 3 years-old today,...
Jane Smith wants to send her son Billy to college. Billy just turned 3 years-old today, September 1st, and should enter college on his 18th birthday. After doing some research, Jane finds out that the tuition cost today for a year of study in a good university in the US is about $50,000 payable at the beginning of the academic year (September 1st of each academic year). It takes, on average, 4 years to obtain a bachelor’s degree. In addition,...
Sandra Robinson has won a state lottery and will receive a payment of $88,000 every year,...
Sandra Robinson has won a state lottery and will receive a payment of $88,000 every year, starting today, for the next 20 years. If she invests the proceeds at a rate of 5.11 percent, what is the present value of the cash flows that she will receive? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to nearest whole dollar, e.g. 5275.) Present value of investment $
Margaret Moore has won a state lottery and will receive a payment of $94,000 every year,...
Margaret Moore has won a state lottery and will receive a payment of $94,000 every year, starting today, for the next 20 years. If she invests the proceeds at a rate of 5.78 percent, what is the present value of the cash flows that she will receive? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to nearest whole dollar, e.g. 5275.) Present value of investment $
Why does Year 7 $150,000 Part B County Ranch Insurance Company wants to offer a guaranteed...
Why
does
Year 7 $150,000 Part B County Ranch Insurance Company wants to offer a guaranteed annuity in units of $500, payable at the end of each year for 25 years. The company has a strong investment record and can consistently earn 7% on its investments after taxes. If the company wants to make 1% on this contract, what price should it set on it? Use 6% as the discount rate. Assume that it is an ordinary annuity and the...
(b) The future value of $900 saved each year for 10 years at 7 percent. (Round...
(b) The future value of $900 saved each year for 10 years at 7 percent. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future valueſ (c) The amount a person would have to deposit today (present value) at an interest rate of 8 percent to have $1,000 five years from now. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Present value (d) The amount a person...
Need help, please show work for solutions. 1.) An investor just invested $10,000 in an investment that is expected to ea...
Need help, please show work for solutions. 1.) An investor just invested $10,000 in an investment that is expected to earn a 6% interest rate. Assuming the 6% annual return is realized, what will be the value of the investment at the end of 25 years? 2.) If you deposit $45,000 into a 5-year CD today earning 4% interest compounded quarterly, what would be the account balance be at the end of 5 years? 3.) A 22-year old college student...
Problem 15-4 (LG 15-2) You deposit $13,000 annually into a life insurance fund for the next...
Problem 15-4 (LG 15-2) You deposit $13,000 annually into a life insurance fund for the next 10 years, after which time you plan to retire. a. If the deposits are made at the beginning of the year and earn an interest rate of 8 percent, what will be the amount in the retirement fund at the end of year 10? b. Instead of a lump sum, you wish to receive annuities for the next 20 years (years 11 through 30)....
Assuming an income tax rate of 40% and a desired annual return of 9%, what is...
Assuming an income tax rate of 40% and a desired annual return
of 9%, what is the net present value
of this investment opportunity? What is the maximum amount that
could be invested and still earning
a 9% annual return? (Round amounts to the nearest dollar.)
Year 1 Year 2 Year 3 Year 4 Year 6 ear Cash sales 150,000 435,000 488,000 300,000 240,000 $ 180,000 75,000228,000 279,000 170,000 140,000 106,000 Operating expenses 52,000 65.200 10,800 40,800 28,800 24,400 Income...
33.33 A financial company advertises on television that they will pay you $75,000 now in exchange...
33.33 A financial company advertises on television that they will pay you $75,000 now in exchange for annual payments of $12,500 that you are expected to receive for a legal settlement over the next 12 years. You estimate the time value of money at 10 percent. Would you except this offer? 33.32 If a person spends $15 a week on coffee (assume $750 a year), what would be the future value of that amount over 9 years if the funds...
GENERAL ANNUITY Instruction: Solve the given situations. Show your solutions (5 points each). 1. Soledad decides to save P2,700 at the end of every 6 months, which is the amount paid into her retirement plan by the company where she works. If she chooses an investment fund that guarantees 8% per year compounded quarterly, how much will she have in 10 years? 2. What is the present value of an annuity of P7,300 per semi-annual period for 7 years at...
Sandra Robinson has won a state lottery and will receive a payment of $88,000 every year, starting today, for the next 20 years. If she invests the proceeds at a rate of 5.11 percent, what is the present value of the cash flows that she will receive? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to nearest whole dollar, e.g. 5275.) Present value of investment $
Margaret Moore has won a state lottery and will receive a payment of $94,000 every year, starting today, for the next 20 years. If she invests the proceeds at a rate of 5.78 percent, what is the present value of the cash flows that she will receive? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to nearest whole dollar, e.g. 5275.) Present value of investment $
Why
does
Year 7 $150,000 Part B County Ranch Insurance Company wants to offer a guaranteed annuity in units of $500, payable at the end of each year for 25 years. The company has a strong investment record and can consistently earn 7% on its investments after taxes. If the company wants to make 1% on this contract, what price should it set on it? Use 6% as the discount rate. Assume that it is an ordinary annuity and the...
(b) The future value of $900 saved each year for 10 years at 7 percent. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future valueſ (c) The amount a person would have to deposit today (present value) at an interest rate of 8 percent to have $1,000 five years from now. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Present value (d) The amount a person...
Problem 15-4 (LG 15-2) You deposit $13,000 annually into a life insurance fund for the next 10 years, after which time you plan to retire. a. If the deposits are made at the beginning of the year and earn an interest rate of 8 percent, what will be the amount in the retirement fund at the end of year 10? b. Instead of a lump sum, you wish to receive annuities for the next 20 years (years 11 through 30)....
Assuming an income tax rate of 40% and a desired annual return
of 9%, what is the net present value
of this investment opportunity? What is the maximum amount that
could be invested and still earning
a 9% annual return? (Round amounts to the nearest dollar.)
Year 1 Year 2 Year 3 Year 4 Year 6 ear Cash sales 150,000 435,000 488,000 300,000 240,000 $ 180,000 75,000228,000 279,000 170,000 140,000 106,000 Operating expenses 52,000 65.200 10,800 40,800 28,800 24,400 Income...
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