4.2 Calculating Present Values Suppose you have just celebrated your 19th birthday. A rich uncle set up a trust fund for you that will pay you $100,000 when you turn 25 If the relevant discount rate is 11 percent, how much is this fund worth today? (See

Q: Suppose Mr. Mitchell wants to set aside $3,000 at the end of each year for the next 18 years to…

A: FUTURE VALUE OF ANNUITY  Future Value of Annuity is the value of a group of regular payments at any…

Q: You are 20 years old today. You want to retire at age 50 and have $4 million at that time. Assume…

A: The present value of money refers to the concept that money available in the future is worth less…

Q: How much money should Prisha invest today in a fund that earns interest at 4.02% compounded…

A: Here, Semi Annual Payment (PMT) is $7,750 Interest Rate (r) is 4.02% Compounding Period (m) is…

Q: You deposit a lump sum P in a trust fund on the day your grandchild is born. The fund earns 7.25%…

A: Present Value(PV) is current value of amount which is paid or received in future. PV is calculated…

Q: You want to create a college fund for a child who is now 4 years old. The fund should grow to…

A: Step 1 Present Value A future sum of money or stream of cash flows' present value, or PV, is their…

Q: FUTURE VALUES Su Mei’s parents want to put enough money aside for her education by the time she goes…

A: Future values refer to those values that are calculated by using the present cash flows. An investor…

Q: You have just celebrated your birthday. Your uncle, has set up a trust fund for you, which will pay…

A: Present value: It can be defined as today’s worth of an investment that will be received in the…

Q: Suppose you win the lottery and you're thinking about whether to take the lump sum or be paid the…

A: First payment: $8 million (immediate payment at t=0)Discount rate: 7%Number of payments: 30Growth…

Q: QUESTION 2 1. You need $30,000 to buy a new Air-Con for your house in 4 years. What value you must…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: uppose you want to begin a college fund for your newborn child. You hope to accumulate $45,000 by 20…

A: Step 1 A future sum of money or stream of cash flows' present value, or PV, is their current value…

Q: Thomas Finley wishes to become a millionaire. His money market fund has a balance of $183,204 and…

A: A money market fund is mutual fund that invests in liquid financial instruments. These instruments…

Q: 5. Suppose you want to invest for the college expenses of your children, which you estimate to be…

A: Present Value is the current price of future value which will be received in near future at some…

Q: You have a 401(k) plan, which is used for retirement savings, at work. If you plan to invest $5,000…

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

Q: 1.1 Your parents set up fund for you 22 years ago that is now worth R47866,34. If the fund earned 8%…

A: According to bartleby guidelines , if multiple questions are asked , then 1st question needs to be…

Q: 2. Suppose you invest $1,800 in a mutual fund today and $2,000 in one year. If the fund pays 5%…

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

Q: Suppose you have the opportunity to invest in a fund that pays 12% interest compounded annually.…

A: Given:workings:

Q: You are the beneficiary of a trust fund that will start paying you cash flows in five years. The…

A: Present value is the current value of money that will be received in the future in the form of one…

Q: answer using TVM calculations and formulas Today Dante and Sharon had their first child. All of the…

A: Initial deposit (I) = $23,000 Monthly interest rate (r) = 0.00266666666666667 (i.e. 0.032 / 12)…

Q: Creating a retirement fund Personal Finance Problem To supplement your retirement, you estimate that…

A: a.Future Value of annuity = $320,000 Period, n = 39 years Interest rate per period, r = 7% Using the…

Q: You would like to give your daughter $75,000 towards her college education 16 years from now. How…

A: The amount to be set aside today is calculated as the present value using following equation Present…

Q: If Pete has $1,000 and invests it into a mutual fund that returns 10%, what will be his Future Value…

A: Future value is expected value at a certain date in future at given rate of interest. Given: Present…

Q: er and draw the cash flow diagram A man invests P 20,000 now for college education of his 2 year…

A: Future value of investment includes the amount that was invested earlier and also the amount of…

Q: Question 6

A: 1: Here FV is $2.3 million i.e. $ 2,300,000R is 7% and n is 34 So:  FV  = PV*(1+r)^nOr $2,300,000 =…

Q: Your grandfather would like to share some of his fortune with you. He offers to give you money under…

A: A future sum of money or a series of future cash flows are valued today using the financial concept…

Q: Assume that your parents wanted to have $180,000 saved for college by your 18th birthday and they…

A: Annuity refers to a contract between the insurance company and the person in exchange for a fixed…

Q: 2. If you decided to save the entire $20,000 from your lottery payment each year for the next 20…

A: Future Value: It represents the expected value of the present sum of the amount. It is estimated by…