An employee contributes $15,900 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,590. Theemployee can allocate the contributions among equities (earning 12 percent annually), bonds (earning 4 percent annually), and moneymarket securities (earning 2 percent annually). The employee expects to work at the company 20 years. The employee can contributeannually along one of the three following patterns:EquitiesBondsMoney market securitiesOption 170%300100%Option 1Option 2Option 3Option 260%355100%Option 350%4010100%Calculate the terminal value of the 401(k) plan for each of the 3 options, assuming all returns and contributions remain constant overthe 20 years. (Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32))

Terminal value is the estimated value of a business or an investment at the end of a business or an…

Calculate the terminal value of the 401(k) plan for each of the 3 options, assuming all returns and contributions remain constant over the 20 years. (Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32))

Calculate the terminal value of the 401(k) plan for each of the 3 options, assuming all returns and contributions remain constant over the 20 years. (Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32))

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

See similar textbooks

Similar questions

Ken Francis is offered the possibility of investing $4,266 today; in return, he would receive $12,000 after 12 years. What is the annual rate of interest for this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "PV of a single amount" to 4 decimal places and percentage answer to the nearest whole number.) Present Value 1 Future Value 1 p (PV of a Single Amount) Interest Rate %6
Famous Frosting, Inc. is reviewing all available information regarding the future use of its baking equipment, which it intends to use for the foreseeable future. (Click the icon to view additional information) Assume that Famous Frosting determines that the likelihood of the expected future cash flows under Estimate 1 is 70% and 30% under Estimate 2 Euture Value of $1 table Future Value of an Ordinary Annuity table Eutute Value of an Annuity Due table Present Value of $1 table Present Value of an Ordinary Annuity table Present Value of an Annuty Due table Read the requirements Requirement a. Compute the carrying value of Famous Frosting's equipment The carrying value of the baking equipment at the end of two years is More info The company has observed a decline in the demand for its products. The information also indicates that this equipment may be obsolete and could be impaired. Famous Frosting acquired the equipment 2 years ago at a cost of $775,000 and depreciated it using the…
Q.2. Subject :- Account
Use a calculator to evaluate the amortization formula m = P r n 1 − 1 + r n −nt for the values of the variables P, r, and t (respectively). Assume n = 12. (Round your answer to the nearest cent.) $14,000; 5%; 7 yr
Solve by using the sinking fund or amortization formula. (Round your answer to the nearest cent.) Sinking fund payment (in $) Sinking FundPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Future Value(Objective) $ every 3 months 4 6.0 quarterly $7,000
The florida lottery agrees to pay the winner $285,000 at the end of each year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.08?
Carrie Tune will receive $30,800 for the next 10 years as a payment for a new song she has written. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. What is the present value of these payments if the discount rate is 16 percent? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Present value b. Should she be willing to sell out her future rights now for $202,000? Yes O No
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
Find the periodic payment for each sinking fund that is needed to accumulate the given sum under the given conditions. (Round your answer to the nearest cent.) FV = $1,900,000, r = 9%, compounded monthly for 25 years
The Maybe Pay Life Insurance Company is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. If the required return on this investment is 5.6 percent, how much will you pay for the policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Please do the following questions with full working
Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding period is the same as the payment period. $14,129 to be accumulated in 3 years; quarterly payments of $1075. The interest rate needed is approximately %. (Type an integer or decimal rounded to two decimal places as needed.)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS