2.23. Your employer has promised to give you a $5,000 bonus after you have been working for him for 5 years. What is the present value of this bonus if the proper discount rate is 8%?

Q: When your firm hires a new employee this year, it is obligated to contribute GBP £5,000 to a defined…

A: Given,  The amount contributed is GBP 5000 Inflation (growth rate) is 2% Rate of return is 10%

Q: How much would you pay for the right to receive $4, 500 at the end of year 1, $3,500 at the end of…

A: The objective of this question is to calculate the present value of future cash flows. The present…

Q: Your first job out of college will pay you $81,000 in year 1 (exactly one year from today). You…

A: C1 =  $81,000 in year 1Salary growth rate, g = 7% per yearC2 = C1 x (1 + g)C3 = C2 x (1 + g) = C1 x…

Q: When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be…

A: Annuity is the no. of payments which are equal in size and made in equal interval of time. Person…

Q: Your employer contributes $50 a week to your retirement plan. Assume that you work for your employer…

A: A simple financial agreement between two persons is an annuity. A predetermined schedule of payments…

Q: u are getting paid $8,000 a month, at the end of each working month. What is the present value of a…

A: Present value is the equivalent value of money today of the future value of money to be received…

Q: Your employer contributes $75 a week to your retirement plan. Assume that you work for your employer…

A: Weekly contribution (C) = 75Weekly discount rate (r) = 0.00144 (i.e. 0.075 / 52)Weekly period of…

Q: 15. You are offered the right to receive $1000 per year forever, starting in one year. If your…

A: Present value of perpetuity-Annual cash rate flows/discount.

Q: Suppose you are paid $2,000 per month and your employer's 40100 matches your contributions by 10% up…

A: Here, Monthly Pay is $2,000 Maximum Contribution in 401K is 15% of Monthly pay Period of working is…

Q: the discount rate is 7.6%, what would you be willing to pay for receiving a payment of $700 eve

A: Value of any annuity is the present value of cash flow from the annuity based on time and interest…

Q: you paid is P 78,758 at a rate of 5% per year. The first payment is done after 4 years. How much are…

A: Let us assume the monthly payment = A Accumulated amount = P 77,061 Interest rate = 4% per year

Q: 1. Assume that you begin saving 3% of your total income in an employer-provided retirement plan at…

A: An "income growth strategy" refers to a deliberate plan or approach aimed at increasing one's…

Q: A shady individual has approached you for a loan. He promises to pay you $500 at the end of five…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: You lend a friend $50,000. Your friend will repay you in 6 equal annual end-of-year payments of…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: Suppose you want to have $400,000 for retirement in 20 years. Your account earns 5.1% interest. How…

A: Future value required (FV) = $400,000 Interest rate = 5.1% Monthly interest rate (r) = 5.1%/12 =…

Q: In one year, you expect to receive $250. From year 2 forward, you expect to receive 3% more than you…

A: Present value refers to the current value of all the future cash flows discounted at a rate of…

Q: You borrow an amount and agree to pay it off with one lump sum payment of $40,000 in 6 years at 10%.…

A: If the interest is compounded annually Then amount to be borrowed can be calculated using following…

Q: You are saving money for a down payment on a new house. You intend to place $5,000 at the end of…

A: Future value:The future value is a financial concept that calculates or shows the value of money in…

Q: If you borrow $2,200 and agree to repay the loan in five equal annual payments at an interest rate…

A: Loan means lending money by one or more individuals or organizations to other individuals or…

Q: $10,000 as a bonus after 6 years. You have calculated the present value of this bonus and the answer…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Q: 14,000 as a bonus after 6 years. You have calculated the present value of this bonus and the answer…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Q: payments with the first payment being made at the end of this year. If the payments are to grow by…

A: This is present value of growing of annuity problem can be solved using formula.Loan…

Q: 21. A friend lends you P500 for a year with 3% interest. How much interest will your friend earn?

A: Interest can be computed using the formula given below. Interest = Principle x Rate x Time

Q: your salary is $25000 and you will be recieving 2.5% pay increase this year. What will your new…

A: Salary increases are a common occurrence for many employees, and one of the most common forms of…

Q: You are getting paid 12k a month at the end of each working month for one year. What is the present…

A: In this question we need to calculate the present value from following details: Salary per month =…

Q: As a loyalty incentive your new employer offers you a bonus of £6750 if you remain with them for six…

A: Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate…

Q: Suppose you are paid $2400 per month and your employer's 401(k) matches your contributions by 50% up…

A: The 401k contributions are the contribution made by the employee and employer for the retirement of…

Q: e following information how much saving would you have at retirement if you invest your saving at 9.…

A: Due to the compounding of interest large amount of the interest is accumulated over the period of…

Q: 7. You graduate from the Trobe University on your 25th birthday and you immediately find a job with…

A: The objective of this question is to calculate the total amount saved for retirement, given a fixed…

Q: 13. You wish to retire in 35 years'time when you get to 65 years old. You will require a monthly…

A: Annuity is an amount (equal) which is received or paid over an equal period of time.

Q: 5. If your working career is 540 months and you want to have a million dollars in your retirement…

A: The FV of an account refers to the value of the account assuming that its cash flows grow at a fixed…

Q: An insurance company receives 40,000 Rials annually for 10 years and pays the first pension after 5…

A: Value at end of deposit period is calculated by future value of annuity. Value at beginning of…

Q: You are considering a job that offers a starting bonus of $2,500, paid immediately, and an annual…

A: Signing Bonus: $2,500, paid immediately. Annual Salary: - Year 1: $44,000  Year 2: $47,000  Year 3:…

Q: ve $12,000 as a bonus after 6 years. You have calculated the present value of this bonus and the…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Q: urchase price of an item is $15,000. You decide to buy it using an installment plan. You put 20%…

A: The borrowing amount depends on the down payment and price of item and both are related to each…

Q: You are hetting paid $12,000 a month, at the end of each wokeing month. What is the present value of…

A: Present value is the equivalent value of money today of the future value of money to be received…

Q: if a client earns  100 000$ per annum now and is guaranteed of 5% increase over the 12 years to…

A: Data given: PV= $100000 r=Rate=5% n=12 years   Required: what will the retirement salary be?