3. A man desires to have P3M money in his savings when he retires after 25 years. This has amount in the present purchasing power. If the expected average inflation rate is 7% per year and the savings earns 5.5%, what lump sum of money should he invest now?

Q: Next year, you will begin receiving $173 per year in perpetuity from a family trust fund (first…

A: In the given question we require to compute the present value of future cashflows from perpetuity.

Q: Calculate  time value of money : If I am to receive $10k in 5 years, given a 5% rate of return, what…

A: Time value of money helps the management for decision making. as the value of money, today is high…

Q: Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of…

A: IRRIt is a capital budgeting technique of a discounted cash flow that gives a rate of return is that…

Q: what will your retirement investment be worth 34 years from now ? Using financial calculator

A: Future value i.e. FV of an annuity due shows the worth of total amount of regular payments made at…

Q: You are saving for retirement. To live comfortably, you decide you will need to save $1,400,000 by…

A: Future Value = fv = $1,400,000Time = t = 48Interest Rate = r = 12%

Q: Suppose you inherit a perpetuity that pays $4,000 each year. Assuming the first payment will occur…

A: The given rate is APR rate i.e. annual percentage rate. The APR is with daily compounding. The EAR…

Q: Suppose an investor wants to have $5 million to retire in 25 years from now. How much would she have…

A: Present Value is the current value of all the cash flows which is to be received in the future which…

Q: A perpetuity pays an annual dividend of $25. If you want to earn a 10% rate of return on this…

A: In this question we require to calculate the amount we should pay for the perpetuity i.e. we need to…

Q: You have an investment opportunity that promises to pay you $18, 499 in four years. Suppose the…

A: Investment is the key allotment of monetary assets with the purpose of creating wages or…

Q: You invest $3,806.00 at the beginning of every year and your friend invests $3,806.00 at the end of…

A: Future value is the estimation of future cash value which is likely to be received in the future…

Q: Suppose you have a financial investment opportunity for which if you invest $2,000 today, you will…

A: Present value of deposited amount (PV) = $2,000Annual payments received (PMT)  = $100Lumpsum amount…

Q: You are given $200 each year starting next year and finishing in 15 years (t = 15). If the discount…

A: We need to use present value of annuity due formula to calculate present value of cash flows stream.…

Q: How much you have to invest each year to reach the goal (assume end of year investments and an…

A: The retirement corpus is 750,000. To calculate the end of year payments, the PMT function in excel…

Q: Present Value You will require $700 in 5 years. If you earn 5% interst on your funds, how much will…

A: The computation is as follows: Hence the present value is $548.47.

Q: Suppose your bank account will be worth $4,200.00 in one year. The interest rate (discount rate)…

A: Present value is the present worth of any sum of money to be received in the future at a specified…

Q: What is the relationship between present value and future value?

A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Q: If you invest $11,000 today, how much will you have in each of the following scenarios? (Click here…

A: The future value of a present value is the value of that amount after taking into account the time…

Q: (Future value of an annuity and annuity​ payments) You are trying to plan for retirement in 12…

A: Saving Account   $       2,10,000 Stocks  $       3,50,000 Annual deposit in saving…

Q: How much money should a young married couple invest now at a 7% annual rate if they want to have…

A: Future value (FV) or (A) = $ 100000 Annual Rate of Investment (i) = 7 %  No. of Years (n) = 30 Years…

Q: Suppose you want to have S0.5 million saved by the time you reach age 30, and suppose you are 20…

A: Future value of the investment (FV) = $500000 Number of years of investment (n) = 10 Rate of…

Q: You are expecting to receive a payment of $5969 in 2 years and $9869 in 6 years. If the interest…

A: One of the useful concept used in finance is time value of money. It says that a dollar amount…

Q: 5. In eighteen years, you require an annuity stream of income that will pay out $100,000 per year…

A: An annuity refers to a fixed stream of payments. In this case the annuity amount is $100,000 per…

Q: You just turned 23 years old and want to retire when you turn 65. You expect to live for 25 years…

A: Current Age = 23 Retrement Age = 65 Total Difference(n2) = 65-23 = 42 years Expected to live(n1) =…

Q: You want to begin saving for your daughter’s college education and you estimate that she will need…

A: Time value of money is one of useful concept being used in finance. It says that amount invested…

Q: How many years would it take save an adequate amount for retirement if he deposits $2,100 per month…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: In wisely planning for your retirement, you invest $12,000 per year for 20 years into a 401(k)…

A: Future worth is computed by multiplying the existing value with a given interest rate.

Q: An investor is considering the following opportunity: He will put capital into a start-up company…

A: Present value is a financial concept used to determine the current worth of future cash flows. It…

Q: Assume that you want to retire 30 years from now with an amount of money that will have the same…

A: Present Value = PV = $3 millionInflation rate = rate = 4.8%Years = nper = 30 yearsSince at the end…

Q: a.  If his opportunity cost is 9​% compounded​ annually, what value should he place on this…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: e year from now. She can save Rs. 5000 per y ck market., which expect to provide average ret ur…

A: interest rate =9% Period =25 years  Annual deposit =5000 Future value FACTOR =(1+r)n-1/r Future…

Q: In wisely planning for your retirement, you invest $35,000 per year for 20 years into a 401K…

A: The future value of an annuity refers to the amount that will be realized in the future as a result…

Q: How much is the annual interest rate, assuming compounding annually Molly should aim at if she…

A: Future Value is the value of current investments at a certain future date at the assumed…

Q: How much money will you have when you retire at the end of 19 years, if the interest rate is 7% per…

A: Future Value: It is the future worth of the annual cash flows compounded over a period of time. The…

Q: 2. A father plans to invest P350,000 on his son's birth for his son's education 7 years later. If he…

A: Interest rate: It represents the rate that is charged on the loan or the rate at which the deposit…

Q: 11. A couple sets a goal to have $2,000,000 in 25 years. If their IRA has a 10% return, how much do…

A: FV = P*(((1+i)^n-1)/i) Where,FV = Future Value = $2,000,000i = Interest rate = 10%n = No. of periods…

Q: Draw the cash flow diagram with your solution. A man wishes his son to receive P500,000 ten years…

A: Final amount at maturity calculated using the formula given below. F = P x (1+r)^n Here F = Final…