fund and needs to decide what to do with it.
Q: need
A: AS the deposits are made at the end of the year. This is an ordinary annuity problem. Formula to…
Q: paying 8 per cent interest. Will there be enough money in the account for Joie to pay for her…
A: Present value illustrates the current value of a sum of money that will be received or paid in the…
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A: Answer: Calculation of the amount that your brother need to deposit today: The amount that your…
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A: Present value (PV) is the current worth of the future value. It is computed if the future value is…
Q: Carolyn is helping to save for her granddaughter’s college fund. It will probably take 18 years…
A: Future value required (FV) = $150,000 Interest rate (r) = 6% Number of annual payments (n) = 18…
Q: Your grandmother deposited $10,000 in an investment account on the day you were born to help pay…
A: Solution:- An amount deposited today somewhere earns interest. The amount invested in beginning is…
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A: Computation:
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A: Calculate the monthly payments as follows:MS-Excel --> Formulas --> Financials -->PMT
Q: Brittany's parents want their child to go to the same college that they did. After talking with the…
A: Working of the amount put down by the Brittany’s Parents is shown: Hence, the amount deposited will…
Q: RIVATE UNIVERSITY & Fees $25,100 & Board $8,000 Supplies $1,300 xpenses $750 tal (1 Year): 351 50
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Q: Sherry is a 25-year-old who just started working. At age 25 she received, she received $20 000 from…
A: Monthly Payment = $140 Interest Rate = 4.5% Time Period = 15 Years
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A: Step 1: The question is based on the concept of time value of money, the value of money change with…
Q: (Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student,…
A: The problem involves finding the rate of return (r) that Nicki would earn if she invests her money…
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…
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A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Ms. Ieda Silva plans to retire in 28 years and expects to live for 25 years after retirement. She is…
A: we can use discounting techniques to value the monthly deposits.
Q: This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving…
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Q: A 529 Plan is a college-savings plan that allows relatives to invest money to pay for a child's…
A: F = P*(1+r/n)n*t P = F/(1+r/n)n*t Where F = future value ($40,000) P = Amount to deposit today r =…
Q: To be able to buy a new computer, Donna decides to save for 5 years. She opens a savings account…
A: Simple Interest = P * R * TWhere P = Principal = $400R = Rate of Interest = 3%T = Time = 5 years
Q: Ashley has a large and growing collection of animated movies. She wants to replace her old…
A: With the given values, we can determine the future value of annuity and annuity due as follows:
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Q: Keith is saving in a bank in order to purchase a new house in six years. She anticipates that the…
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A: Using excel FV function
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A: The financial principle of investment revolves around balancing risk and return. Investors seek to…
Q: years
A: Needs of money for Billie Year of retirement = 50 , current age = of Billie = 20, First of all.so…
Q: 2. Julie has decided save up and donate $5000 to the college she attended. She would like to make…
A: Q2)Amount required in 5 years5000Annual rate4.75%Number of years5Fortnightly savings36.96
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: A man wants to set up a 529 college savings account for his granddaughter. How much would he need to…
A: An annuity is a contract where a fixed amount is paid periodically. It is used to help investors…
Q: Linda is 10 years old. Her parents want to save for 4 years of college, starting at 18. Her parents…
A: Here, Withdrawal Amount in 18,19,20,21 birthdays is $20,000 Discount Rate is 10% Time to save is 7…
Q: When Steven was 5 years old (on his birthday), his grandmother decided to set up a trust account to…
A: The amount to be deposited today is the present value of amount to be received on 18th birthday.…
Purchase a 10-year bond
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Put the money in a savings account
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Take out a 5-year certificate of deposit
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Keep the money under her mattress and add a little bit to it regularly
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- 1. Josiah, a 16 year old high school student, plans to use the $5,000 for a car down payment in two years. He would like to earn a good rate of return but needs to access his money exactly in two years. He prefers something with a lower risk as well. What is the best type of investment for Josiah? Why?2. Abigail is 22 years old and would like to save up for emergencies. She wants to be able to access her money as needed and incur a low risk. What is the best type of investment for Abigail? Why?7. Future value of annuities There are two categories of cash flows: single cash flows, referred to as "lump sums," and annuities. Based on your understanding of annuities, answer the following questions. Which of the following statements about annuities are true? Check all that apply. O An annuity is a series of equal payments made at fixed intervals for a specified number of periods. An annuity due earns more interest than an ordinary annuity of equal time. □ Ordinary annuities make fixed payments at the beginning of each period for a certain time period. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. Which of the following is an example of an annuity? O An investment in a certificate of deposit (CD) O A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of timeYour daughter needs to be able to draw $50,000 a year from her college savings fund (you started from birth) to pay for college expenses to obtain a medical degree (assume she spends 4 years for bachelor, 4 years for med school, then additional 2 years as resident and yearly spending will be consistent from year to year). At start of her college career, she intends to invest her savings in government securities that should return 5.5% a year compuounded continuously. a. Obtain the equation for dP/dt and then find the genearl solution of P(t) with, as yet undetermined, initial value P_0. b. How large must your daughter's initial college savings be so that she can continue drawing her $50,000 income until she becomes a doctor?
- Parents wanted to save enough money to send their daughter to college. The parents were unable to save money right at birth but rather started saving money when she was 5 years old and will save until she is 18 years old. The parents would like to save up $75,000 to cover tuition and other expenses. How much would the parents need to save each month in order to meet this requirement Assume the parents save the money into an account that generated an interest of 2% per year O a $360 O b. 3370 Oc$400 Od $490Your grandmother loves you and wants you to get a graduate degree. She promises to pay you $1,225 right away and an equal amount every 6 months for the a total of 5 years to encourage you to continue your graduate education and get a Master of Business Administration (MBA) degree at Cal State LA. She really does love you. If you don’t spend any of the money amounts that she gives you, how much will you have accumulated at graduation if you could invest the funds at 5% compounded semiannually?Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000 from her grandmother’s estate. She plans to use the money for the down payment on a home in ten years when she finishes her education. Right now the funds are in a savings account paying 1.0 percent APY. How much would Isabel have in ten years if instead she purchased a ten-year CD paying 3.0 percent?
- A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $900.00, how much money was invested at each rate? How much money was invested in the CD account? (Round to the nearest cent.) GILBSuzy wants to retire in 30 years. She expects to live 25 years after retirement. She prepares a savings plan to meet the objectives: First, after retirement she would like to be able to withdraw $20,000 per month. The first withdrawal will occur at the end of the first month after retirement. Second, she would like to leave her daughter a $500,000 inheritance. Lastly, she wants to set up a fund that will pay $5000 per month forever to her favorite charity after she dies. These payments will begin one month after she dies. All the monies earn 10% annual rate compounded monthly. How much will she have to save per month to meet these objectives? She wishes to make her first deposit from now and the last deposit on the day she retires.Christie received a total of $1025 from her graduation party. She wants to save this money for a vacation 10 years later. She puts the money into a savings account (Plan A) at a 6% simple interest rate. After the 10 years are over she has accumulated $1640 which covers her vacation expenses. After doing a little research she realizes that she could have earned more money had she invested the money into a different savings plan (Plan B) of 7% interest compounded weekly. How much would Christie have had to save after graduation in Plan B to accumulate the same amount of money that she received in Plan A after 10 years? Round your answer to the nearest cent.
- Lashonda wants to buy a new house but needs money for the down payment. Her parents agree to lend her money at an annual rate of 2%, and charged a simple interest. They lend her $6000 for 3 years. She makes no payments except the one at the end of that time. a) how much total interest will lashonda have to pay? b) what will the total repayment amount be (including interest)?Rusty just graduated from high school and his parents have made him the following offer: They will give Rusty $10,000 now that he can use to buy a car or they will give him $20,000 when he graduates from college to use either as a down payment on a house or to pay off a car. Rusty decides to go to college in the hopes of getting more money in a few years. Which of the following statements would be true regarding Rusty's decision? Rusty understands that it is better to have money now because would get nothing in the future if he does not graduate from college. Using the time value of money, the $10,000 he would receive now would have to grow by more than double in the time that it takes him to graduate from college in order for it to be better to take the $10,000 now. Rusty would need to receive $30,000 now for both the car and down payment on the house because he will need the money in case he wrecks the car. Rusty is making a poor decision because the average high school graduate…Grandma Patt has decided to open a savings account for her newborn granddaughter. The savings account pays 3% interest. If Grandma Patt wants there to be $10,000 in the account in 18 years, how much should she deposit today? Assume no other deposits or withdrawals. a) $5,873.95 b) $17,024.33 c) $8,362.17 d) $10,609.23