16. Audrey is a participant in her employer's tax-sheltered annuity plan. Her annuity has an accumulated value of $20,000, and she wants to borrow $9,000 of it to purchase a used car. What is the longest repayment period she can obtain? A. two years B. three years c. five years D ten years

16. Audrey is a participant in her employer's tax-sheltered annuity plan. Her annuity has an accumulated value of $20,000, and she wants to borrow $9,000 of it to purchase a used car. What is the longest repayment period she can obtain? A. two years B. three years c. five years D ten years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: At the time of her grandsons birth, a grandmother deposits 8,000 in an account that pays 2%…

A: Given, PV=Deposits= $8000 Rate(r)=6.5% (compounded monthly) Monthly rate=2%12=0.001667 No. of…

Q: eives a $8,000 gift toward a college education from her grandparents. How much will the $8,000 be…

A: Future value is value of the principal amount of $ 8000 after 18years at 5.6% compounded quaterly.…

Q: Your grandmother bought an annuity from Great-West Life Insurance Company for $439,002 when she…

A: Time, the value of money refers to the concept used for calculating the future value of an asset…

Q: Molly starts an IRA (Individual Retirement Account) at the age of 24 to save for retirement. She…

Q: Jenna purchases a retirement annuity that will pay her $1,000 at the end of every six months for the…

A: Semi Annual Payment Semi Annual Payment $ 1,000.00Time Period (years)8Interest…

Q: Marissa has $202,971.39 in an account that earns 8% per year, compounded monthly. Her 27th birthday…

A: The time value of money is the worth of money today is more than the worth of money tomorrow this is…

Q: None

A: Here's a detailed calculation for better understanding. For Grace's Savings Plan: Grace deposits…

Q: Willie deposits a fixed monthly amount into an annuity account for his child’s college fund. He…

A: Here, to calculate the monthly contribution we have to use the formula of future value of annuity.…

Q: A. Anthony inherited an annuity worth $3,811.62 from his uncle. The annuity will pay him four equal…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Una Day is planning to retire in 14 years, at which time she hopes to have accumulated enough money…

A: Time till retirement: 14 YearsAnnuity amount after retirement: $17,000Years of annuity: 19…

Q: You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 25 and…

A: Your annual investment, PMT = $ 1,500 Starting age = 25Number of Years, n = 15Annual Interest…

Q: 8. George pays $410 a year for $65,000 of home insurance with a $250 deductible. By choosing a $1000…

A: Deductible: It is the amount that is paid by the insured to the insurance company for the damage or…

Q: Alice needs P 4,000 per year for four years to go to college. Her father invested P 5,000 in 7%…

A: Future value of an amount is calculated as: = Amount * (1+rate)^number of periods

Q: Carla Lopez deposits $2,500 a year into her retirement account. If these funds have an average…

A: Future value of Annuity cash flows = A x [(1+i)^t -1] / iwhereA = Periodic cash flow = $2,500 per…

Q: Mike joins a savings program where he deposits $1000 at the begint he will earn a perpetuity paying…

A: Here,

Q: You contribute $1,000 annually to a retirement account for eleven years and stop making payments at…

A: Withdrawal using present value (PV) of funds at retirement refers to the strategy of calculating the…

Q: Dylan purchases a retirement annuity that will pay him $1,500 at the end of every six months for the…

A: Present value is an estimate of the present value of future cash values that may be received at a…

Q: 1) Sabrina waits to start saving for retirement until age 35. If she saves the same $8000 each year…

A: Annual saving (P) = $8000 Period from 35th year to 65th year (n) = 30 Interest rate (r) = 7.00%

Q: A 40-year-old woman decides to put funds into a retirement plan. She can save $2,000 a year and earn…

Q: Maude Pasy $5000 a year into an annuity contract for 25 years. Maude is paying what?

A: Annuity contract is a contract which involves fixed amount of payment for a fixed period or for the…

Q: You contribute $1,000 annually to a retirement account for seven years and stop making payments at…

A: Using excel FV function

Q: Cyrus deposits a fixed monthly amount into an annuity account for his child's college fund. He…

A: Interest earned refers to an amount that is being earned by the investors over the amount of…

Q: 36. Pete invested $50,000 in a variable annuity 15 years ago when he was 52. The contract is now…

A: The straight life option is a payout option in an annuity contract that provides a guaranteed income…

Q: If you desire to have $80,000 for a down payment for a house in 7 years, what amount would you need…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Rachel starts an IRA (Individual Retirement Account) at the age of 26 to save for retirement. She…

A: Compound interest is a financial concept that involves the addition of interest not just on the…

Q: Jenna owns a jewelry business, and she plans to save $500 every month for 3 years to buy precious…

A: Using Excel

Q: Bobbi opens an IRA account in which she deposits $3,000 per year until she retires in 50 years. If…

A: The accumulated amount can be calculated with the help of future value of annuity function

Q: 3. A 45-year-old woman decides to put funds into a retirement plan. She can save $2,000 a year and…

A: Calculation of accumulated savingsThere is 20 years between 45 to 65 years. Hence the duration of…

Q: 6. Mary is paid bi-weekly and she is currently 20 years old. Mary wants to have $500 at the end of…

A: A retirement plan refers to the investment to be made in the savings account that provides the…

Q: Brenda Young desires to have $16,500 eight years from now for her daughter’s college fund. If she…

A: Data given: FV= $16500 n=8 years r=12% (compounded annually) Required: what amount should she…

Q: Ginger Rogers deposits $3,000 a year into her retirement account. If these funds have an average…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Emily is trying to decide between investing $1,000 or $1,500 at the beginning of each year for the…

A: Future value of money is the amount of deposit done and the amount of compounded interest…

Q: r. Bearer may choose to take a lump-sum payment of $25,292.8 now from his insurance policy or an…

A: Annuity is the series of equal payments that are made at regular intervals and payments are uniform…

Q: A couple plans to save for their child's college education. What principle must be deposited by the…

A: The concept of time value of money will be used here. Money invested in an account grows due to the…

Q: Annuity A. Edward purchased an annuity for $30,000. The annuity will pay Edward $700 per month for…

A: A Exclusion ratio: 35.71% Excluded Amount in a year: $2,999.64 Taxable Amount in a year: $5,400.36 B…

Q: A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn…

A: We need to calculate the persent value of annuity by using this formula. PV of annuity =CF*…

Question

A. two years

B. three years

c. five years

D ten years

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

6. Kevin deposits $1423.62 each quarter into an annuity account for his child's college fund in orderto accumulate a future value of $85,000 in 12 years. How much of the $85,000 will Kevin ultimatelydeposit in the account, and how much is interest earned?
Michelle purchases a retirement annuity that will pay her $3,000 at the end of every six months for the first eleven years and $600 at the end of every month for the next five years. The annuity earns interest at a rate of 2.3% compounded quarterly. a. What was the purchase price of the annuity? Round to the nearest cent b. How much interest did Michelle receive from the annuity? Round to the nearest cent
Sara wants to have $530,000 in her savings account when she retires. How much must she put in the account now, if the account pays a fixed interest rate of 9%, to ensure that she has $530,000 in 18 years time? OA. $112,357 OB. $202,243 OC. $119,492 O D. $157,300
Carla Lopez deposits $5, 200 a year into her retirement account. If these funds have an average eaning of 6 percent over the 40 years until her retirement, what will be the value of her retirement account?
A 2.
Kevin deposits a fixed quarterly amount into an annuity account for his child's college fund. He wishes to accumulate a future value of $90,000$⁢90,000 in 1616 years. Assuming an APR of 3.7%3.7% compounded quarterly, how much of the $90,000$⁢90,000 will Kevin ultimately deposit in the account, and how much is interest earned? Round your answers to the nearest cent, if necessary.
Janet receives a $ 10,000 life insurance benefit. If she uses the proceeds to buy an n-year annuity immediate, the annual payout will be 1534.86. If a 2n-year annuity due is purchased, the annual payout will be 994.13. Both calculations are based on an effective annual interest rate of i. Calculate i.
9. Implied interest rate and period Consider the case of the following annuities, and the need to compute either their expected rate of return or duration. Ryan inherited an annuity worth $3,280.16 from his uncle. The annuity will pay him five equal payments of $800 at the end of each year. The annuity fund is offering a return of Ryan's friend, Sebastian, wants to go to business school. While his father will share some of the expenses, Sebastian still needs to put in the rest on his own. But Sebastian has no money saved for it yet. According to his calculations, it will cost him $30,044 to complete the business program, including tuition, cost of living, and other expenses. He has decided to deposit $4,200 at the end of every year in a mutual fund, from which he expects to earn a fixed 7% rate of return. It will take approximately for Sebastian to save enough money to go to business school.
Erica purchases a retirement annuity that will pay her $1,500 at the end of every six months for the first twelve years and $500 at the end of every month for the next six years. The annuity earns interest at a rate of 3.8% compounded quarterly. a. What was the purchase price of the annuity? Round to the nearest cent b. How much interest did Erica receive from the annuity? Round to the nearest cent
11. Sandra Bellows 65 years old purchased an annuity for $25,000. Starting at the beginning of the year, Sandra will receive $200 per month. What is the total amount that Sandra can include in her gross income from her annuity this year, if multiplier is 15.0?
Suppose Gretchen's health insurance has a $500 annual deductible. Gretchen is responsible for 20 percent co-pay when she meets her deductible. If Gretchen has $800 in medical expenses this year, how much must she pay?
K (Annuity payments) Emily Morrison purchased a new house for $180,000. She paid $60,000 upfront and agreed to pay the rest over the next 10 years in 10 equal annual payments that include principal payments plus 9 percent compound interest on the unpaid balance. What will these equal payments be? a. Emily Morrison purchased a new house for $180,000 and paid $60,000 upfront. How much does she need to borrow to purchase the house?