AutoSave Off HFilePasteClipboardE9112345678910111213141516171819202122238Home InsertAGCalibriB IU •BB XProblemsPage Layout✓✓11HFont✔fxaFormulas Data ReviewA^ AAHomework 6S= =ab==== 2 ✓207AlignmentсViewSSearchAutomate HelpGeneral$ %✓ 9Numberv.00.00 ➜0Analytic Solver▬▬▬▬__CConditional Format as CellFormatting Table StylesStyles2. A company has decided to end it's pension program. The company has given employees the option oftaking a lump sum payment of $350,000 when they reach 65 or an annuity of $3000 a month for life(starting at 65). Assuming an average interest rate of 8% and 20 years of retirement, which option shouldthe employees take?DEInsertDeleteFormatCellsFWBΣRateNumber Of PeriodsPMTPVATSort & Find &Filter ✓ Select ✓EditingGMorrison, Justin MJSensitivitySensitivity8%20H00100Add-insAdd-ins8%20$350,000.00 $3,000.00($4,374,999.96) ($37,500.00)ICommentsEENAnalyzeDataShowToolPakCommands GroupJShareKx

Lump sump amount=$350000Monthly amount=$3000Interest rate=8%Period=20 years

Answered: blems option of company has decided to…

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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Problem 17-2 (Algo) PBO calculations; present value concepts [LO17-3] Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $92,000 at the end of 2021 and the company's actuary projects her salary to be $290,000 at retirement. The actuary's discount rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021.3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer…
Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to the nearest dollar. Replacement Cost of Building: $340,000 Face Value of Policy: $306,000 Amount of Loss: $2,500
Solve the problem Sandra deposits $3000 at the beginning of each semiannual period for 16 years at 8% interest compounded semiannually. Find the amount she will have on deposit. O$98,250.68 $174,985.01 O $195,628.59 O $185,104.41 lo
QUESTION 10 Ann gets a 30 year 3/1 Fully Amortizing ARM for $1,000,000, with monthly payments and monthly compounding. Ann pays $10,000 in closing costs. The initial rate is 2.50%. In the future, the rate will reset to 250 basis points above the LIBOR. There are no rate caps or floors. Suppose at origination and at the rate reset the LIBOR was 1%. Part 1: What is the loan balance when the rate resets (round to nearest whole number and enter without commas, e.g. 123,456 enter as 123456)? Part 2: What is the annualized true APR for the loan (round two decimal places and enter without % sign, e.g. 4.95% enter as 4.95)?
ST Trucking just signed a $3.8 million contract. The contract calls for a payment of $1.1 million today, $1.3 million one year from today, and $1.4 million two years from today. What is this contract worth today at a discount rate of 8.7 percent? O a. $3,202,223.89 b. $2,108,001.32 c. $3,202,840.91 d. $3,783,648.48 e. $3,480,817.37
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N = 1% = PV = PMT= FV= C. P/Y = C/Y = PMT: END BEGIN PV = The Lees have purchased a new home for $360,000, and put a down payment of $50,000 on it. They have a mortgage for the balance, amortized over 20 years at 5.25%. If the Lees pay off the mortgage at the end of the 20 years, how much interest will they have paid in total? PMT= FV = N= 300 (25X12) 1% = d. A family has a mortgage on a home for $295,000, amortized over 25 years, at an APR of 4.5%. The monthly payment on the mortgage is $1,639.71/ If the family makes a $25,000 extra payment at the end of the 4th year of the mortgage, how much interest will they save by the end of the 25-year period of the mortgage? Hint: Assume the monthly payment is adjusted at the end of the 4th year, to keep the original amortization of 25 years. P/Y= C/Y = PMT: END BEGIN N= 1% = PV = PMT= FV= P/Y = C/Y = PMT: END BEGIN
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