HomeworkLib
Question

9. Olivia is 30 years old and has just changed to a new job. She has...

9. Olivia is 30 years old and has just changed to a new job. She has $37,500 in the retirement plan from her former employer. She can roll all of that money into the retirement plan of the new employer. She will also contribute $400 at the end of each month ($4,800 per year) into her new employer's plan. If the rolled-over money and the new contributions both earn an annual return of 5.85%, compounded monthly, how much should she expect to have when she retires in 35 years? A. $860,728
B. $843,576
C. $839,696
D. $820,912
E. $810,643


10. What is the present value of a monthly $150 annuity payment over 5 years if interest rates are 8.64% (APR)?
A. $7,067
B. $7,235
C. $7,287
D. $7,318
E. $7,340


11. What is the present value of a monthly $150 annuity due payment over 5 years if interest rates are 8.64% (APR)?
A. $7,067
B. $7,235
C. $7,287
D. $7,318
E. $7,340

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

10. What is the present value of a monthly $150 annuity due payment over 5 years if interest rates are 8.64% (APR)?

Ans. C. $7,287

11. What is the present value of a monthly $150 annuity due payment over 5 years if interest rates are 8.64% (APR)?

Ans. C. $7,287

P = PMT x ((1 - (1 / (1 + r) ^ n)) / r)

Where:

P = the present value of an annuity stream

PMT = the dollar amount of each annuity payment

r = the interest rate (also known as the discount rate)

n = the number of periods in which payments will be made = 5 years x 12 = 60

Present value of annuity = $150 x ((1 - (1 / (1 + 0.0864) ^ 60)) / 0.0864)= $7,287

0 0
Add a comment
Know the answer?
Add Answer to:
9. Olivia is 30 years old and has just changed to a new job. She has...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Consider that you are 35 years old and have just changed to a new job. You...

    Consider that you are 35 years old and have just changed to a new job. You have $72,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $2,800 each year into your new employer's plan. If the rolled-over money and the new contributions both earn a 7 percent return, how much should you expect to have when you retire in 30 years? (Do not...

  • Consider that you are 30 years old and have just changed to a new job. You have $91,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $400 each month into y

    Consider that you are 30 years old and have just changed to a new job. You have $91,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $400 each month into your new employer's plan. If the rolled-over money and the new contributions both earn a 7 percent annual return, how much should you expect to have when you retire in 38 years?

  • You have turned 35 years old and have recently switched to a new job. You have...

    You have turned 35 years old and have recently switched to a new job. You have $70,000 in the retirement plan from your former employer. You will roll that money into the retirement plan of the new employer. In addition, you will contribute $8,000 each year into your new employer’s plan. If the rolled-over money and the new contributions both earn an 8 percent return, how much money would you expect to have when you retire in 28 years? How...

  • You have turned 40 years old and have recently switched to a new job. You have...

    You have turned 40 years old and have recently switched to a new job. You have $200,000 in the retirement plan from your former employer. You will roll that money into the retirement plan of the new employer. In addition, you will contribute $10,000 each year into your new employer’s plan. The rolled-over money and the new contributions both earn an 8 percent return. How much money will you able to withdraw each year for the 20 years after your...

  • Problem 4 and 5-2 Future Value Consider that you are 40 years old and have just...

    Problem 4 and 5-2 Future Value Consider that you are 40 years old and have just changed to a new job. You have $157,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $7,900 each year into your new employer's plan. If the rolled-over money and the new contributions both earn a return of 7 percent, how much should you expect to have when...

  • Problem 4 and 5-1 Future Value Consider that you are 35 years old and have just...

    Problem 4 and 5-1 Future Value Consider that you are 35 years old and have just changed to a new job. You have $89,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $4,500 each year into your new employer's plan. If the rolled-over money and the new contributions both earn a 7 percent return, how much should you expect to have when you...

  • Sara Sharp, a 30-year-old insurance broker, decided to start a retirement plan. She figures that her...

    Sara Sharp, a 30-year-old insurance broker, decided to start a retirement plan. She figures that her income for the next 20 years will be sufficient to deposit $300 at the end of each month into her retirement plan. She will then let the money sit for another 10 years until she is 60 years old. If Sarah’s retirement plan earns 5.75% compounded monthly, what amount will she have when she turns 60?

  • An individual is currently 30 years old and she is planning her financial needs upon retirement. She will retire at age...

    An individual is currently 30 years old and she is planning her financial needs upon retirement. She will retire at age 65 (exactly 35 years from now) and she plans on funding 20 years of retirement with her investments. Ignore any social security payments and ignore any taxes. She made $106,000 last year and she estimates she will need 75% of her current income in today's dollars to live on when she retires. She believes that inflation will average 3...

  • An individual is currently 30 years old and she is planning her financial needs upon retirement....

    An individual is currently 30 years old and she is planning her financial needs upon retirement. She will retire at age 65 (exactly 35 years from now) and she plans on funding 20 years of retirement with her investments. Ignore any social security payments and ignore any taxes. She made $131,000 last year and she estimates she will need 75% of her current income in today's dollars to live on when she retires. She believes that inflation will average 3...

  • 1. What is the present value of a $1,200 payment made in five years when the...

    1. What is the present value of a $1,200 payment made in five years when the discount rate is 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 2. What is the future value of a $1,000 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 3. What's the present value of a $930 annuity payment over five years...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT