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Your accountant has conviced you that you should invest your bonus from this year into your retirement account-instead of buying a new sport car- because of the high expected return on the investment. Determine which of these fundamental factors is affecting the cost of money in the senario described. a. inflation b. Time prefernces for consumption  c. Risk

The time value of money is used for many important financial decisions that could affect long-term goals. The interest rate you pay on a loan can affect the amount you pay each period. An advertised monthly lending rate of 9% is about 11% per year. This difference between an advertised rate and the annualized rate is based on finer TVM details that may be overlooked by borrowers. What practical TVM application would you expect to encounter in your future? Explain.

The website is www.moneychimp.com. THE ANSWER MUST BE CORRECT.

Assume you deposit $1,000 in your savings account. Performance a sensitivity analysison the relationship between future value at the end of year 10 and interest rate. Plot therelationship on a chart and label the graph clearly

According to the discounted payback rule, an investment is acceptable if its discounted payback is less than Blank______.  Multiple choice question. some prescribed number of years the life of an investment internal rate of return average accounting return

An individual has determined utilizing the annuity method of capital needs analysis that he needs $1,045,656 at the beginning of his retirement to meet his retirement life expectancy goals. If this individual would like to be more conservative in his retirement planning forecast and maintain this capital balance throughout his retirement life expectancy of 32 years, given an expected earnings rate of 6%, and an inflation rate of 3% during the period, how much more would he need to have at the beginning of his retirement?

You have just made your first $5,500 contribution to your retirement account. Assuming you earn a return of 10 percent per year and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? (Does this suggest an investment strategy?) Input area: Present value Interest rate Number of years Number of years (Use cells A6 to 89 from the given information to complete this question. Your answer should be a positive value.) Output area: $5,500 10% 45 35 Future value Future value $

Scenario 1: Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to    and the level of investment spending to    .

Term Answer   Description Discounting H    A. A series of equal (constant) cash flows (receipts or payments) that are expected to continue forever. Time value of money      B. A cash flow stream that is created by an investment or loan that requires its cash flows to take place on the last day of each quarter and requires that it last for 10 years. Amortized loan      C. A series of equal cash flows that occur at the beginning of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on). Ordinary annuity      D. A 6% return that you could have earned if you had made a particular investment. Annual percentage rate      E. A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term. Annuity due      F. A type of security that is frequently used in mortgages and requires that the loan payment contain both interest and loan principal.…

You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the investment? Group of answer choices The cash flows are in the form of a deferred annuity, and they total to $100,000. You learn that the annuity lasts for 10 years rather than 5 years, hence that each payment is for $10,000 rather than for $20,000. The discount rate decreases. The riskiness of the investment's cash flows increases. The total amount of cash flows remains the same, but more of the cash flows are received in the later years and less are received in the earlier years. The discount rate increases.

Provide correct answer

In the present value of an annuity due table, the factors ________. Group of answer choices decrease as the interest rates increase, given a set number of periods decrease as the periods increase, given a set interest rate increase as the periods decrease, given a set interest rate increase as the interest rates increase, given a set number of periods