Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago, commission free. She sold it today for a total amount of $3125. She plans to invest the entire amount in a different corporation’s stock today, but she must now pay a $30 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but neglect any tax effects. What is the total amount that she receives next year?

Q: Gail has won a lottery that pays her $100,000 at the end of this year and increases by 15 percent…

A: We are given the following information -Lottery payment$100,000Increase in lottery payment15%No. of…

Q: our grandmother left you an inheritance that pays $440 at the end of each year for a total of 12…

A: Annual Payment = p = $440Number of payment = n = 12Time until First Payment = t = 5Interest Rate = r…

Q: Tammy Faye requires a 12% before-tax return on her real estate investments. If she invests $78,000…

A: Given that:PV=$78,000Interest Rate = 12% = =0.01Monthly Expenses = $120n=5×12=60 months

Q: Morgan Fillmore's lifelong dream is to own his own fishing boat to use in his retirement. Morgan has…

A: Present value of  amount is computed as follows:-PV = FV*PVFwhereFV= future valuePVF = present…

Q: Julie has just retired. Her company's retirement program has two options as to how retirement…

A: Solution 1a: Present value of first option = Lump sum immediate payment = $158,000 Present value of…

Q: Jenny has a monthly salary of $5,000 and an additional monthly allowance of $1,000. In Year 2020,…

A: In this we have to find out monthly mortgage payments and from that we can get the MSR and TDSR.

Q: how much will John have in his retirement account at age 60?

A: Present age is 25 Rate of return = 8% Retirement age = 60

Q: Komiko Tanaka invests $18,000 in LymaBean, Inc. LymaBean does not pay any dividends. Komiko projects…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Several years ago John bought an endowment insurance policy that is about to mature. He has the…

A: given data   option 1 gives $20000 now  option 2 gives $40000 in 10 years  for option 2 we will…

Q: Komiko Tanaka invests $14,500 in LymaBean, Incorporated. LymaBean does not pay any dividends. Komiko…

A: Capital gain can be short-term or long-term based on the time period. If the asset is sold in one…

Q: Millie has inherited $4500 and has the choice between two options to invest her money. The first…

A: Future value refers to an amount of the current asset at some future date. It is helpful for…

Q: Jay Johnson graduated from Another University 10 years ago and has not yet started to invest for his…

A: 401(k) retirement plan refers to the plan being sponsored by an employer for allowing eligible…

Q: Bill O’Brien would like to take his wife, Mary, on a trip three years from now to Europe to…

A: Future value:

Q: sabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000…

A: Here we will use formula of future value of money to calculate amount after 10 years :   FV = PV × 1…

Q: Kate invested $1,200 4 years ago at 7% per year for 7 years. 2 years ago, she invested $2,000 at…

A: Here, Details of First Investment are as follows: Investment Amount is $1,200 Investment made 4…

Q: Isabel Lopez from Lewiston, Idaho, who is 19 years old, recently received an inheritance of $55,000…

A: The Certificate of Deposit is a savings instrument that provides a fixed rate of return to the…

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: Mary wants to buy a mountain cabin for her retirement. Mary recer cabin she wants will cost $40,000…

A: Let  Investment amount be x.40000=x1+61003Simplify both side of equations .40000=148877125000x=…

Q: Katie recently retired and met with her financial planner. She arranged to receive $40,000 the first…

A: Solution-a1=$40,000a2=$40,000+$210     =$40,210

Q: our friend has just celebrated her 30th birthday and accepted her first job. She must now decide how…

A: Your friend is undertaking her retirement planning. She has crystallized the annuity required in her…

Q: Kayla wants to have $100,000 saved when she graduates. She plans to graduate in 6 years and believes…

A: Option a: This option is correct. Let's prove it:As per Kayla the amount she shall invest today is…

Q: Ten years ago, Ginny inherited $50,000 from her grandmother. She decided to invest all of this money…

A: Amount invested to earn return is known as investment. Investment offers two types of return. One is…

Q: Erika inherits $20,000, and decides to invest it in an account earning 6.25% interest, compounded…

A: Formula Future value = PV*(1+i)n Where PV - Investment i.e. $20,000 i - Semi annual interest rate…

Q: "Christopher recently inherited $ 1,290,000, which she immediately invested in an equity index…

A: Amount invested today = $1,290,000Monthly withdrawal = $6,000Number of years = 47 yearsAccount…

Q: Cyrus Petit is planning for the day when his child Laura, will go to college. Laura has just turned…

A: Given:

Q: How much cash will Komiko retain, after taxes, if she holds the investment for 15 years and then she…

A: Cash Retained by komico is $26,241.89

Q: 6 years ago Mary purchased shares in a certain mutual fund at Net Asset Value (NAV) of $51. She…

A: The NAV provides investors with a useful tool for assessing the performance of investment funds and…

Q: Christina is planning on buying an insurance policy that will pay for $157,250 a year for 25-years,…

A: The time value of money is a concept in finance that takes into account the effect of compounding in…

Q: Jillian invested $2,000 six years ago at 4.5 percent interest. She spends all of her interest…

A: Data given: Amount invested=$2000 Interest rate=4.5% Jillian spends all of her interest earnings…

Q: Stella plans to purchase 100 shares of a stock (ticker: HOOD) that is currently trading at $72 per…

A: Stella plans to purchase 100 shares at $72 per shareShe also takes a call loan of $4,000The broker…

Q: Jason and Kerri​ Consalvo, both in their​ 50's, have ​$47,000 to invest and plan to retire in 10…

A: Interest rate on Bonds  The coupon rate is the interest rate, expressed as a percentage, that the…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.