An aunt gifts you with $12,000, but only after you invest it for one year. She gives you two choices. 1. Invest the entire sum at 4.2% compounded monthly. 2. Invest $1000 at 7.1% each month in an annuity that pays every month. (a) What is the future value of the money invested with method 1? (b) How much interest is earned with method 1? (c) What is the future value of the money invested with method 2? (d) How much interest is earned with method 2? (e) Which method would you choose?

Q: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and…

A: Variables in the question:Annual payment (P)=$1000Growth (g)=8%Interest rate(r)=11%

Q: Gina has $500,000 accumulated in her RRSP and intends to use the amount to purchase a 20-year…

A: Here, Accumulated AmountPV $          500,000.00Time Period in years20Annuity PeriodQuarterly4Time…

Q: Suppose your parents decide to give you $10,000 to be put in a college trust fund that will be paid…

A: Present value = $10,000 Interest rate per period, r = 1.5% Number of compounding periods, n = 5 × 4…

Q: The AGI of the Newtons, a married couple, is $199,000 this year. They would like to contribute to a…

A: 2. The maximum  to contribute can be calculated as follows : Results obtained :

Q: Your uncle is about to retire, and he wants to buy an annuity that will provide him with $95,000 of…

A: Annual Payment (P) = $95,000Interest rate (r) = 4.70% or 0.047Number of years (n) = 20Payment timing…

Q: You graduate and receive a $10,000 cheque from your grandparents. You decide to save it toward a…

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

Q: 17) Sun Woo wants to purchase an annuity that will pay him $1,000 a month for fifteen years. If he…

A: The Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a…

Q: Your friend offers to pay you an annuity of $2,500 at the end of each year for 3 years in return for…

A: Annual Payment (P) = $2,500Interest rate (r) = 5.5% or 0.055Number of years (n) = 3

Q: To save for a down payment on a home, you invest in an annuity that pays 7.0% annual interest,…

A: The interest earned on the annuity can be calculated with the help of future value of annuity…

Q: You have just won the lottery and took a lump sum payout. After talking with a financial adviser you…

A: Present value of $16,000: Present value: $376,205.407024

Q: (Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated…

A: PMT is a series of cash flows (annuity) and can be paid/received at the end of each period, called…

Q: A new investment opportunity for you is an annuity that pays $800 at the beginning of each year for…

A: Beginning of period Annuity Annuity Amount = 800 Time Period (N) = 3 years Rate = 5.5%

Q: A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance.…

A: Calculate the retirement money as follows:MS-Excel --> Formulas --> Financials -->  FV

Q: Pretend that you are saving up for a down payment on a car or house. Pretend that we get an…

A: A savings account seems to be an account that is opened by a salaried person. It is a very basic…

Q: Suppose Ted deposits $10,000 in a savings plan earning 5% compounded annually and Tess deposits…

A: Future value  The value of the current investment on a future date is called the future value. The…

Q: Suppose you are offered an investment that will allow you to double your money in 8 years. You have…

A: Note: Hi! Thank you for the question, As per the Honor code, we are allowed to answer one question…

Q: WE'VE MOVED IN TO A NEW HOUSE! My spouse & I are planning to have our own home but have a limited…

A: Given: Particulars Amount Amount $20,000 Years 5 Interest rate 10%

Q: f you desire to have $15,000 for a down payment for a house in five years, what amount would you…

A: Please note that the factor values tables are not attached in the question. The factors can be…

Q: A new investment opportunity for you is an annuity that pays $560 at the beginning of each year for…

A: Annual payment (P) = $560Interest rate (r) = 5.4% or 0.054Payment time = BeginningNumber of years…

Q: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and…

A: We will use the concept of the time value of money here. As per the concept of the time value of…

Q: PLEASE ANSWER IT ASAP FOR AN UPVOTE. I REALLY NEED IT NOW. 2. Jake deposits 1200 pesos at the end of…

A: Future value of annuity is the future value of all the stream of cash flows.

Q: A new investment opportunity for you is an annuity that pays $550 at the END of each year for 3…

A: The Present Value of Ordinary Annuity refers to the concept which gives out the discounted or…

Q: The pipe guy plans to deposit $78,000 into an investment each year for the next 10 years so he can…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: Carol wants to invest money in an investment account paying 10% interest compounding semi-annually.…

A: PRESENT VALUE  Present Value is the Current Value of Future Sum of Money. Present Value = Future…

Q: A new investment opportunity for you is an annuity that pays $1,100 at the beginning of each year…

A: The maximum amount to be paid for annuity can be calculated by discounting future cash inflows at…

Q: Suppose you find an annuity that pays 8% annual interest, compounded annually. If you invest in this…

A: Annuity refers to the amount of installment that is paid regularly in a specific time gap and for a…

Q: A new investment opportunity for you is an annuity that pays $650 at the beginning of each year for…

A: An annuity is a financial product that provides a series of regular payments to an individual over a…

Q: Suppose you deposited $39,000 in a bank account that pays 5.25% WI daily compounding based on a…

A: Future value is the amount initially deposited and amount of comounding interest accumulated over…

Q: Your friend offers to pay you an annuity of $6,800 at the end of each year for 3 years in return for…

A: Present value of Annuity = Annuity ×1-(1+r)-nrwhere,r=interest raten=number of periods

Q: a) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years.…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: You have a chance to buy an annuity that pays Php2,500 at the end of each year for 3 years. You…

A: An annuity is a type of security that pays periodic payments over a specified period of time. In…

Q: Your friend Anne is planning to invest $700 each year for four years and will earn a rate of 6…

A: Given information, Annuity Amount = $700 Time Period = 4 years  Interest rate per year = 6%

Q: Your friend offers to pay you an annuity of $7,700 at the end of each year for 3 years in return for…

A: Cash flow, C = $7700              No. of periods, n = 3 rate of interest, i = 5.5%

Q: Amanda wants to take the next four years off work to travel around the world. She estimates her…

A: Requirement 1: Funding Travels with 12% InterestSince Amanda's savings earn interest, we can't…

Q: It is now the beginning of the year. Assume that, starting at the end of the year, you will make…

A: The future value of annuity is calculated using following equation Future value = P×(1+r)n-1r Where,…

Q: Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: you have a chance to buy an annuity that pays $1,000 at the end of each year for 5 years. You could…

A: The most we should pay for the annuity is nothing but the present value of annuity. Therefore, In…

Q: Your uncle is about to retire, and he wants to buy an annuity that will provide him with $6,000 of…

A: RATE 15.25% YEARS 24 PMT (MONTHLY PAYMENT) 6000 FUTURE VALUE $0 FIRST PAYMENT IMMEDIATE…

Q: Pretend that you are saving up for a down payment on a car or house. Pretend that we get an…

A: Future value of a present amount Future value is always more than the present amount, deposited in…

Q: Your friend Anne is planning to invest $500 each year for five years and will earn a rate of 5.5…

A: According to the time value of money, the money available in the present is worth more than the same…

Q: Your uncle is trying to figure out how much he has to have set aside today to pay for his son's…

A: The value of current payment or upcoming flow of payments at any future date when flow of payment…

Q: Cheryl is setting up a payout annuity with her bank. She wants to receive a payout of $1200 per…

A: Using excel PV function

Q: Find the future value of each using the future value of an ordinary annuity formula.  Shelly…

A: Using Future value function in excel

Q: (Related to The Business of Life: Saving for Your First House) (Future value) You are hoping to buy…

A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: You are contributing money to an investment account so that you can purchase a house in six (6)…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: You are hoping to buy a house in the future and recently received an inheritance of $16, 000. You…

A: The FV of an investment refers to the total value of its cash flows at a particular future date…

Q: Sandra wants to take the next six years off work to travel around the world. She estimates her…

A: The annuity's Present worth is the current lump sum amount that an investor will require for making…

Q: To double the money you received from your grandparents, it will take years. (Round to one decimal…

A: The future value of an investment forecasts the expected value of an investment at a given future…