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30 After reviewing her financial affairs, Jasmine has determined that she would like the $75,000 death benefit from one of her insurance policies to go to a local registered charity. The whole life policy in question has a $45,000 cash surrender value (CSV) and she pays an annual premium of $500. Jasmine's current cash flow situation is quite good. She is living a comfortable retirement. However, she is worried as she has assets, that of the taxes that will be payable after her death will result in considerable capital gains. She is unable to purchase a new life insurance to cover the income tax triggered at death because of her health. What should Jasmine do to fulfill her desire to donate $75,000 to the registered charity and alleviate the taxes payable following her death? NVBDQncreUJQWW1 Ya0w4cWZjYVhIQT09 → a. O Surrender the life insurance policy and donate the CSV. b. O Name the registered charity as beneficiary of the life insurance policy. c. O Assign the life insurance policy…

Assume the couple John and Helen want to fund a college education for their son, William, age 2. William will attend college starting at age of 18. He needs $90,000 available at age 18 for his college expense.  The couple feels they can make 6% after-tax return annually in a 529 education fund.  How much do they need to deposit today to meet their goal?     Assume the couple John and Helen want to fund a college education for their son, William, age 2. William will attend 4 years of college starting at age of 18. He needs $60,000 available at age 18 for his college expense.   Starting from now, the couple plans to invest $3000 to the 529 education fund at the end of each year.  What rate of annual return do they need to achieve?

Challenge question. In the chapter text, we dealt exclusively with a single lump sum, but often we may be looking at several lump-sum values simultaneously. Let's consider the retirement plan of a couple. Currently, the couple has four different investments: a 401(k) plan, two pension plans, and a personal portfolio. The couple is 9 years away from retirement. They believe they have sufficient money in their plans today so that they do not have to contribute to the plans over the next 9 years and will still meet their $2 million retirement goal. Here are the current values and growth rates of their plans: 401(k): $89,000 growing at 7%. Pension Plan One: $342,000 growing at 8%. Pension Plan Two: $192,000 growing at 7.75%. Personal Portfolio: $155,000 growing at 8.75%. Does the couple have enough already invested to make their goal in 9 years? Hint: View each payment as a separate problem, and find the future value of each lump sum 9 years from now. Then add up all the future values.…

What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds on these financial accounting question?

An Investor started saving for retirement today and plans to make annual contributions into her retirement account. Which one of the following actions will have the greatest positive impact on the total amount in her retirement account as of the day she retires? Assume she earns a positive rate of return each year. Multiple Choice O Retiring at age 62 rather than age 66 Decreasing the Investment's average rate of return O Decreasing the amount she saves each year O Delaying her retirement by one year Delaying any additions to her savings by one year

43. Bobbi Proctor does not want to “ gamble ” on Social Security taking care of her in retirement . Hence she wants to begin to plan now for retirement . She has enlisted the services of Hackney Financial Planning to assist her in meeting her goals . Proc tor has determined that she would like to have a retirement annuity of $ 200,000 per year , with the first payment to be received 36 years from now at the end of her first year of retirement . She plans a long , enjoyable retirement of about 25 years . Proctor wishes to save $ 5,000 at the end of each of the next 15 years , and an unknown , equal end - of - period amount for the remaining 20 years before she begins her retirement Hackney has advised Proctor that she can safely assume that all savings will earn 12 percent per annum until she retires , but only 8 percent thereafter . How much must Proctor save per year during the 20 years preceding retirement ? EBK CONTEMPORARY FINANCIAL MANAGEM chapter5, problem 43

5. Understanding term life insurance Deborah is a 25-year-old female with limited financial resources and a four-year-old son. Ideally, she would like to purchase permanent insurance coverage, but her primary concern is making sure her son will be taken care of financially if she dies before he graduates from college. Given her current financial situation, she is interested in a term life insurance policy that will last 20 years. Deborah goes to an insurance broker to purchase a policy and is shown the following two rate tables to help her choose between annual renewable and level premium term life insurance. Yearly Rates on Term Life Insurance Policies   Annual Renewable Term Life Rates     Policy Year Age 25 Age 40 Age 60 1 $119 $139 $252 5 $147 $219 $562 15 $176 $507 $1,313 20 $259 $1,054 $2,989 Total Cost 5 Years: $625 $897 $2,100 Total Cost 15 Years: $2,135 $6,205 $11,987 Total Cost 20 Years: $3,777 $8,287 $22,346     Level Premium…

e She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. c. She If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Problem 5 EVALUATING LUMP SUMS AND ANNUITIES. Crissie just won the lottery, and she must choose between three award options. She can elect to receive a lump sum today of $61 million, to receive 10 end-of-year payments of $9.5 million, or to receive 30 end-of-year payments of $5.5 million. a. If she thinks she can earn 7% annually, which should she choose? b. If she expects to earn 8% annually, which is the best choice? c. If she expects to earn 9% annually, which option would you recommend? d. Explain how interest rates influence the optimal choice. Problem 6 PV OF A CASH FLOW STREAM. A rookie quarterback is negotiating his first NFL contract. His opportunity cost is 10%. He has been offered three possible 4-year contracts. Payments…

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Hi I have a question regarding Austrlian Retirement and Financial Planning. In this example, the couple are retired and one of them is ill and looking for a retirement home, the home is going to cost $450,000 deposit. Neither of the couple work and draw 50,000 from their super in order to stay afloat. They have 20,000 and 562,000 in super combined, have a 900,000 dollar home. They also have 10,000 worth of home contents, a 15,000 dollar vehicle, and 55,000 cash in the bank. It is important to note they have 0 debt and everything is fully paid off. Neither of them have ever received pension money or government support. Myrtle wishes to put bob in an aged care facility, and when that is done she wants to return to work part time. 1. How will Myrtle's income be funded of $40,000 per annum be financed now, in the future and when she retires in 10 years time?

Case Study: Time value of money Mr. Road has reached his seventieth birthday and is ready to retire. Mr. Road has no formal training in finance but has saved his money and invested carefully. Mr. Road owns his home (the mortgage is paid off) and does not want to move. He is a widower, he wants to bequeath the house and any remaining assets to his daughter. He has accumulated savings of $180,000, conservatively invested. The investments are yielding 9% interest. Mr. Road also has $12,000 in a savings account at 5% interest. He wants to keep the savings account intact for unexpected expenses or emergencies. Mr. Road's basic living expenses now average about $1,500 per month, and he plans to spend additional $500 per month on travel and hobbies. To maintain this planned standard of living, he will have to rely on his investment portfolio. The interest from the portfolio is $16,200 per year (9% of $180,000), or $1,350 per month. Mr. Road will also receive $750 per month in social security…

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Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $3,500 per year for her retirement fund and assumes that she'll retire at age 65.   How much will Molly have accumulated when she turns 65 if she invests in equities and earns 8 percent on average? Round your answer to the nearest dollar. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 45. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar. 2a. Nest egg at 4% 2b. Nest egg at 8%

6. Adrianna wants to provide retirement income for her dependent parents for 23 years should she die. Adriana earns $67,500 and feels that her parents could live on 70% of that amount. If the insurance funds could be invested at 5.5%, how much life insurance does Adrianna purchase using the desired income method? O $714,666.67 $618,666.67 $859,090.91 $1,546,667.84

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Molly Lincoln, a 30-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $4,000 per year for her retirement fund and assumes that she'll retire at age 65.   How much will Molly have accumulated when she turns 65 if she invests in equities and earns 10 percent on average? Round your answer to the nearest dollar. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 45. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar. 2A. Nest egg amount at 6% 2B. Nest egg amount at 10%

Jasmine has decided that she wants to build enough retirement wealth that, if invested at 6 percent per year, will provide her with $3,000 of monthly income for 30 years. To date, she has saved nothing but she still has 25 years until she retires. Jasmine believes that she can earn 6 percent on her investments until she retires. How much money does she need to contribute per month to reach her goal? O $512.93 O $863.49 O $616.27 O $722.05

Bobbi Proctor does not want to“gamble”on Social Security taking care of her inretirement. Hence she wants to begin to plan now for retirement. She has enlisted the services of Hackney Financial Planning to assist her in meeting her goals. Proctor has determined that she would like to have a retirement annuity of$200,000 per year, with the first payment to be received 36 years from now at theend of her first year of retirement. She plans a long, enjoyable retirement of about 25 years. Proctor wishes to save $5,000 at the end of each of the next 15 years, and an unknown, equal end-of-period amount for the remaining 20 years before she begins her retirement. Hackney has advised Proctor that she can safely assume that all savings will earn 12 percent per annum until she retires, but only 8 percent thereafter. How much must Proctor save per year during the 20 years preceding retirement?

Joe is 30 years old, married, and his wife is expecting their first baby. Joe makes $48,000 per year and has $200 budgeted per month to spend on life insurance. He has started looking at his options and has three choices: BAD WHOLE LIFE BETTER 20-YEAR TERM BEST 20-YEAR TERM $250,000 $500,000 Coverage $250,000 Premium $200/month $13/month $20/month Investments $0 $187/month $180/month Investment Value $34,000 at Age 50 $186,840 $179,847 Investment Value at Age 70 $124,000 $2,222,010 $2,138,835 *Always buy a policy that covers 10-12 times your annual pretax income! R FOUNDATIONS IN PERSONAL FINANCE Life Insurance Plans CHAPTER 9, LESSON 5 PAGE 1 OF 3 1. For each insurance option, how much would Joe pay in total premiums over 20 years compared the amount of coverage he would receive? 2. Which option is the best value for Joe's money? Why? 3. How did Joe arrive at the numbers in the investments row on his chart? 4. Why is Joe thinking about buying life insurance?

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QUESTION 1 Kinny is a single dad. His family lives in Raleigh but he wanted some space while being close enough to visit, so he took a job as a radiologist for a clinic in Virginia Beach. Kinny's daughter Sivan is starting kindergarten, and now that he doesn't have to pay for preschool every day Kinny is ready to start saving up for a home of their own. His gross annual pay is $62,610. Considering that most single parents with one child have about 20% of their gross income withheld for federal and state taxes, Medicare, Medicaid, Social Security, and other unavoidable expenses, about how much net income does Kinny bring home every month? QUESTION 2 The recommended "rule" is to keep housing expenses to less than 1/3 of your net income. What is the maximum that Kinny should be spending on housing each month? QUESTION 3 Housing includes homeowners insurance, utilities such as electricity, natural gas, water, sewer, and trash pick up. For most households these are about 25% of the housing…

3. A 45-year-old woman decides to put funds into a retirement plan. She can save $2,000 a year and earn 6 percent on this savings. a. How much will she have accumulated if she retires at age 65?

I won't to this question answer general Accounting

Engineering Econ:   You’re looking at your parents’ retirement plans and studying the differences between their saving habits. On her thirty-first birthday, your mother Virginia invested $1,500 into her employer’s retirement plan, and she makes annual $1,500 payments for 10 years, so that her total contribution (principal) is $15,000. Your mother then stops making payments into her plan and keeps her money in the savings plan, untouched for 25 more years until retirement at age 65. Your father Anthony starts putting money aside on his forty-sixth birthday, when he deposits $2,000, and he continues these annual payments for 20 years until he reaches 65 years old. Thus, Anthony’s contributed principal amounts to $40,000 over this period of time. If Virginia’s and Anthony’s retirement plans both earn interest at a rate of 6% per year, compounded annually, then what is the difference in the future value of their savings when your parents turn 65? (e.g., FW(Virginia)-FW(Anthony))  Round…

Ora (43) and wants to know about saving for her superannuation when she plans to retire at age 60. At the moment, Ora is single but has some prospects. She currently earns about $110,000 per annum, and her employer will let her salary sacrifice to superannuation. You expect that she could earn a net CPI-adjusted rate of 3% in the long term on any investments based on your assessment of her needs and risk profile. Required a) Assuming Ora wants 75% of her pre-retirement salary as annual income, estimate Ora’s income at age 60.   b) Calculate how much Ora needs to have saved by the time she is 60 to have her pre-retirement salary as annual income during retirement. Assume her adjusted life expectancy is 32 years at the age of 60.   c) Ora would like to make additional superannuation contributions up to the concessional contribution cap of $25,000. Assuming that Ora's employer is required to contribute $10,450 to her super, show the tax effectiveness of salary sacrificing to make…