A contractor is calculating the present worth of the salaries of his five employees over the next six years. The combined salaries of the employees through the end of this year are $1,500,000. If he expects to give each employee a raise of 4% each year, the present worth of his employees' salaries at an interest rate of 5% per year is PBlank 1. Blank 1 Add your answer

A contractor is calculating the present worth of the salaries of his five employees over the next six years. The combined salaries of the employees through the end of this year are $1,500,000. If he expects to give each employee a raise of 4% each year, the present worth of his employees' salaries at an interest rate of 5% per year is PBlank 1. Blank 1 Add your answer

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Mr. Nina borrows $425,000 from the bank at 3.5% per year interest over a 30-year period. He can make a monthly month-end payment of $1,400 and would like to make a balloon payment at the end of the 30-year period. What would be the size of the balloon payment? $218,058 $323,069 $433,197 $548,512 Please show how to work this out in Excel if possible?
Mr. Bee will deposit $1,500 every year, earning interest rate of 9% compounded annually, the first deposit to be made immediately. What is the future (terminal) value of this investment at the end of 10 years? Answer format: $1,234.56 *
Your retiring will be in 2036. You need to invest some money so that you can earn 10,000 per year for the next 20 years. If the rate of interest is 8% compounded annually, what is the amount of the current investment? $98,181 $90,181 $88,181 $80,181
1
An engineer planning for her retirement will deposit 10% of her salary each year into a stock found. The initial balance in her stock found (year 0) is S20,000. If her salary this year is $120,000 (end of year 1) and she expects her salary to increase by 5% each year, what will be the future worth of the found after 25 years if it earns 15% per year? O $4,202.290.77 O 5,480,462.35 O 5,315,867.58 O $4,138,818.64 O 3,543,911.72
John wants to do Task A. Task A will take two years and $40,000. $15,000 is paid after the 1st year. Next, $25,000 is paid after 2 years from now. A friend Annie who works at the same company as John wants to make both payments on John's behalf. The condition is that John must make deposits every quarter in Annie's corporate savings account which pays 7.8% yearly interest that is compounded quarterly. Annie will only pay if John agrees to this. John will need to make a total of 9 payments with 1 being made immediately (before time passes). Then, John will make 1 payment every quarter (every 3 months) until Task A is finished in the next 2 years. This amounts to a total of 9 same-sized payments. What is each equal payment John makes? Include cash flow diagrams, complete workings, and assumptions.
4. Suppose Dr.Campbell has a home purchase of $145,000 at the APR of 6% for 30 years, and he have made 8 years of payments. If he decide to refinance that loan for 4%for 15 years. ) How much is his original monthly payment? -- Create an amortization schedule for the first three months for the beginning 30 years loan.
A downtown bank promises its potential employees a $ 8000 sign-on bonus, an additional bonus of $ 12000 two years from now, an additional bonus of $ 19000 four years from now, and an additional bonus of $ 23000 six years from now. Lavanya was hired today but only intends to work for this bank for three years. What is the present value of this bonus payment structure to her? (Assume that money is worth 8% p.a. compounded quarterly)
Your employer automatically puts 5 percent of your salary into a 401(k) retirement account each year. The account earns 8% interest. Suppose you just got the job, your starting salary is $50000, and you expect to receive a 3% raise each year. For simplicity, assume that interest earned and your raises are given as nominal rates and compound continuously. Find the value of your retirement account after 35 years Value = $
A company buys a machine for $18,000, which it agrees to pay for in five equal annual payments, beginning one year after the date of purchase, at an annual interest rate of 7%. Immediately after the second payment, the terms of the agreement are changed to allow the balance due to be paid off in a single payment the next year. What is the final single payment? Solution: 1. Draw the CFD by yourself; 2. First, calculate annual payment amount for the first 2 years: O A= + 7%, • )=18000x =$ o The final payment is the • worth of the : unpaid payments. 3. Second, Calculate the single payment amount due at the end of the 3rd year: F=S
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. An engineer signs a contract to work in Hong Kong for 5 years. The contract specifies that at the end of his 5 years of service, he will receive $90,000 at the end of each of the following 3 years. Assume funds earn 6% compounded annually. (a) Find the amount needed at the end of his 5 years of service to fund the payments. (b) Find the end-of-year payment into a sinking fund needed to accumulate this amount. * $240,570.90; $42,677.28 $250,570.90; $45,677.28 $42,677.28; $240,570.90 Other:

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