Inflation is expected to be 4% in the coming year. If Mr. Gonzo earned 37,000 this year how much must he earn in the following year to keep up with inflation and maintain a balance between his income and his increasing Expenditures

Q: iii) Someone borrows $ 45,000 at a rate of 20% per annum and after one year begins to pay annual…

A: Loan amount (PV) = $ 45,000 Annual interest rate (r) = 20% Number of annual payments (n) = 5

Q: Suppose you have $4,000,000 when you retire and want to withdraw an equal amount each year for the…

A: The regular fixed periodic deposits/withdrawals made at each interval are recognized as an annuity.…

Q: You plan to retire 10 years from today. Your current utility bills are $3,330 per year. How much…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Karren has just retired and plans to consume $9,460 from the retirement account every year for the…

A: The retirement account value is calculated as the present value of withdrawals.

Q: You are going to save money for your son’s education. You have decided to place $4,146 every half…

A: Variables in the question:Deposit (PMT)=$4146Rate=9.51% p.a.Semi-annual rate==4.755%N=3 yearsnper=3…

Q: Suppose that Jerry's 401(k) will have an average APR of 8% for 40 years. Assume both he and his…

A: Investments made by investors earn returns in the form of interest. The accumulated value of the…

Q: By the time he turns 60, Justin (just turned age 31) wants the amount in his RRSP to have the…

A: Future Value of an Ordinary Annuity (FVOA): The Future Value of an ordinary annuity refers the…

Q: Our clients saved $2,500,000 for retirement.  They wish to withdraw $20,000 from the fund each month…

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

Q: On January 1, Bob just reached age 30. He earned $90,000 at the end of last year. It is assumed that…

A: Note: This question has five sub-parts. The first three have been answered below. Given: Bob's…

Q: You have $10,000 in your 401(k) at work. You expect to retire in 35 years. How much will you have in…

A: The concept of time value of money will be used here. As per the concept of time value of money any…

Q: Mr. James would like an income of $300,000 per year in equal instalments for fifteen (15) years. How…

A: Solution: An equal amount received each period at end of period, it is known as ordinary annuity. We…

Q: A client retires with $3.75 million and requires the funds for 35 years - they can earn 8.5%, but…

A: Retirement amount=$3.75 million=$3750000Period=n=35 yearsInterest rate=8.5%Inflation=4.5%

Q: Brenda plans to reduce her spending by $90 a month. Calculate the future value of this increase in…

A: The future value of money pertains to the worth of a sum of money at a later point in time,…

Q: You have just retired with savings of $8 million. If you expect to live for 34 years and to earn 14%…

A: Here; We have Savings of $8million Expected life is 34 years Interest rate is 14% To Find: Yearly…

Q: Cooper wants to save for college. Assuming he puts $5,000 into an account at the end of each year…

A: Money invested anywhere changes in value with the change in time. This is simply understood as the…

Q: Brian wants to invest the same amount into a sinking fund at the end of every 3 months so that he…

A: We will use the below formula to calculate the amount of each deposit   Quarterly deposit =…

Q: Earnest T needs $900 for his next trip to Raleigh. He has $660 in cash. How long in years will it…

A: Current value (P0) = $660 Future value (FV) = $900 Quarterly interest rate (r) = 0.03325 (i.e. 0.133…

Q: If he could buy a TV 40 years ago for $300, what would a comparable one cost today if the consumer…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: How long can you make these withdrawals if you earn an annual percentage rate of 4.8 percent?

A: Present value illustrates the current value of a sum of money that will be received or paid in the…

Q: You are saving money for a down payment on a new house. You intend to place $5,000 at the end of…

A: Future value:The future value is a financial concept that calculates or shows the value of money in…

Q: You have $187, 620 saved toda and plan to withdraw $9,000 a year. How long can you make these…

A: Time, value of money refers to the concept used for estimating the future value of the current asset…

Q: How much does your client need to contribute to a fund each month for the next 25 years (first…

A: Annuity refers to an amount or stream of equal cash flows (CF) paid or received periodically.…

Q: You choose to invest your $3,435 income tax refund check (rather than spend it) in an account…

A: Investment (PV) = $3,435 Interest rate (r) = 6% Period (t) = 30 Years

Q: Mr. De Jesus invested P20,000 every quarter over a 12year period. If his money earns an annual rate…

A: Periodic deposit = 20,000 quarterly = 4 months in a year  year =12 Total periods = 12*4 =48 months…

Q: If you make an equal deposit at the end of every year to the account for the next 40 ears, what is…

A: Future value required=$8000000Period=n=40 yearsInterest rate=8%

Q: Suppose Justin saves $3,550 every year for retirement. if he earns 8.8% annually, how much will he…

A: In this question we require to compute the amount Justin will have in 41 years i.e. we need to…

Q: retire in 27 years. When you do, you would like to have the purchasing power of $114,071 today,…

A: The present value of annuity due refers to the current value of a series of future payments. The…

Q: 2.27. You decide to put $10,000 in a money market fund that pays interest at the annual rate of…

A: This problem is related to time value of money along with tax provision. We require to calculate the…

Q: I accepted my first job with a $93000 salary, and is already looking forward to retirement in 40…

A: Given: Salary today = $93000 Amount required at the time of retirement = 70% of today salary…

Q: f a person spends $6 a week on coffee (assume $300 a year), what would be the future value of that…

A: Future value is the amount deposited and amount of interest accumulated over the period.In the given…

Q: How much will your utility bills

A: The worth of today’s dollar at a future date is the future value of the dollar. For example, the…

Q: You have determined that you will need to accumulate $1,000,000 in your retirement account in order…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Someday you hope to retire and have $200,000 of income a year in today's dollars. You want to fund…

A: To solve this problem, we need to use the concept of future value and present value of an annuity.…

Q: Danny wants to save some money using the following schedule. Starting today, he will make $100…

A: Future value of annuity ( FVA) is stream of recurring cashflow compounded at specified rate to…

Q: A civil engineer who is about to retire has accumulated 750 000 in a savings account that pays 6%…

A: The question is based on the concept of Financial Management. Annuity refers to the series of equal…

Q: Jeffery Johnson is saving $1,450,000 per year in a savings account that is paying annual compound…

A: The value of equal payments or a single payment at any specific date which falls in future is called…

Q: Jenny Lopez estimates that as a result of completing her master’s degree, she will earn an…

A: Future Value (FV) is a financial concept that represents the projected worth of an investment,…

Q: Continuing the scenario from question 3: Assume you have chosen to invest the $1,000 monthly…

A: Annuity refers to series of equalized payments that are made either at start or end of specific…

Q: If John wants to retire with $10,000 per month, how much principal is necessary to generate this…

A: Interest amount = Principal * Rate / 100 Or, Principal = Interest amount / Rate * 100

Q: Jesscia bailey currently has $6,300 in her 401K retirement account. She will contribute $200 a month…

A: Value of investment refers to the amount which is invested by the investors for the purpose of…

Q: Heather is planning to retire in 7 years. She will then need an income of $1444 at the beginning of…

A: Periodic deposit = 1,444Interest rate = 7.33%Number of years = 25 yearsNumber of years left for…

Q: You invest $4,716.00 at the beginning of every year and your friend invests $4,716.00 at the end of…

A: Future value is the estimation of future cash value which is likely to be received in the future…

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.