When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $7. Based on actuarial tables, "Joltin' Joe" could expect to live for 39 years after the actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of the flowers will increase at 3.6 percent per year, when expressed as an EAR. Assuming that each year has exactly 52 weeks, what is the present value of this commitment? Joe began purchasing flowers the week after Marilyn died.---**Multiple Choice Options:**- $4,715.03- $4,479.28- $4,950.79- $4,573.58- $4,856.49

Present value is the equivalent value today of the future cash flow based on time value of money and…

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers her grave every Sunday as long as he lived. The week after she died in 1962, a bunch resh flowers that the former baseball player thought appropriate for the star cost abo $7. Based on actuarial tables, "Joltin' Joe" could expect to live for 39 years after t actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of th lowers will increase at 3.6 percent per year, when expressed as an EAR. Assuming th each year has exactly 52 weeks, what is the present value of this commitment? J began purchasing flowers the week after Marilyn died. Multiple Choice

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers her grave every Sunday as long as he lived. The week after she died in 1962, a bunch resh flowers that the former baseball player thought appropriate for the star cost abo $7. Based on actuarial tables, "Joltin' Joe" could expect to live for 39 years after t actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of th lowers will increase at 3.6 percent per year, when expressed as an EAR. Assuming th each year has exactly 52 weeks, what is the present value of this commitment? J began purchasing flowers the week after Marilyn died. Multiple Choice

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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Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $30,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 20 years at an estimated cost of $1,239,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $550,000 to his nephew Frodo. He can afford to save $1,700 per month for the next 20 years. If he can earn a 12 percent EAR before he retires and a 8 percent EAR after he retires, how much will he have to save each month in Years 21 through 30?
Ami has decided to be cryogenically frozen at the time of her death so that she can be resurrected once medical science has advanced far enough to keep her alive. In preparation, Ami places $161,367 into an investment account which earns an 7.4% rate of return per year. To her amazement, she is one day brought back to life. "How long has it been?" she asks. "245 years" the strangely dressed person replies. How much money is sitting in Ami's investment account? You are welcome to round to the nearest whole number. You need to be within $1 million of the correct answer.
In addition to these monthly expenses, other future outlays must be accounted for. Before they had a child, Yvette worked as a software engineer, but her knowledge and skills are now somewhat outdated. Therefore, they include $25,000 for Yvette to go back to school. Additionally, Tim and Yvette want to create a college fund of $30,000 to fund their child's college education. They estimate that final expenses (funeral costs and estate taxes) will amount to $12,000. Finally, they have taken out a loan for home improvements of $130,000 and an automobile loan of $5,000. They own their home but still have an outstanding mortgage of $300,000. Using this information, complete the next portion of Step 1 to determine the total financial resources needed. 2. Special needs a. Spouse's education fund b. Child's college fund c. Other needs $0 3. Final expenses (funeral costs and estate taxes) 4. Debt liquidation a. House mortgage b. Other loans c. Total debt (4a+4b) 5. Other financial needs $0…
A special endowment assurance policy is issued to a male aged 55 and a female aged 50 with a term of 20 years. A benefit of $500,000 is payable immediately on the last death of the two lives. There is a survival benefit of $600,000 if both of them are alive; if only one of them is alive, the survival benefit is $400,000. Premiums are payable annually in advance over the term of the policy as long as one of them is alive. The interest rate is 4% per annum and the mortality basis is PA92C20. Calculate the net annual premium for this policy. Correct your answer to the nearest cent.
Rachel is 20 years old. She plans on retiring in 40 years when she will be 60 years old. Rachel believes she will live until she is 105. In order to live comfortably, she needs a substantial retirement income. She wants to receive a weekly income of $5,000 during retirement. The payments will be made at the beginning of each week during her retirement. Also, Rachel has pledged to make an annual donation to her favorite charity during her retirement. There will be a total of 45 payments. The payments will be made at the end of each year. The first annual payment will be for $20,000. Rachel wants the annual payments to increase by 3% per year. The payments will end when she dies. In addition, she would like to establish a scholarship at Toronto Metropolitan University. The first payment from scholarship would be $50,000. The first scholarship payment would be made 7 years after she retires. Thereafter scholarship payments will be made every year. She wants the payments to continue after…
Vijay
When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $7. Based on actuarial tables, "Joltin' Joe" could expect to live for 25 years after the actress died. Assume that the EAR is 9.8 percent. Also, assume that the price of the flowers will increase at 4.2 percent per year, when expressed as an EAR. Assume that each year has exactly 52 weeks and Joe began purchasing flowers the week after Marilyn died. What is the present value of this commitment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Michael Howitt of Berkley, Michigan, recently had his gallbladder removed. His total bill for this surgery, which was his only health care expense for the year, came to $13,810. His health insurance plan has a $450 annual deductible and an 80/20 coinsurance provision. The cap on Michael's coinsurance share is $1,910. Round your answers to the nearest dollar. a. How much of the bill will Michael pay? b. How much of the bill will be paid by Michaels insurance?
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Ally estimates that a couple retiring this year will need $275,000 for healthcare costs. Assuming healthcare costs increase by 6% per year, what will a couple who will retire in 12 years need for healthcare costs? A) 553,354 B) 492,483 C) 586,555 D) None of the above
Jim Jaffers, a cash-basis farmer, paid $2,100 for fertilizer and lime expenses, the effects of which will last about three years. He received $1,200 for fertilizer from the USDA. His total expense for fertilizer, feed, seed, and similar items for the current year and each of the past three years has been 40% of his total farming expense. Which of the following is correct with respect to actions Jim may take? Deduct the fertilizer and lime expense in the year the expense was paid. Capitalize the fertilizer and lime expense, and depreciate over a five-year recovery period. Deduct the expense only in the year the fertilizer and lime are applied to the soil. Deduct $900 [$2,100 expense – $1,200 USDA payment for fertilizer] in the year paid Please provide detailed explanation.
Theresa Morgan of Boone, IA, age 55, recently suffered a stroke. Her total bill for this care was $125,500. After leaving the hospital, she spent 25 days in a nursing home that cost $170 per day. Theresa, who earns $4,500 per month, missed two months of work. Theresa had a health insurance plan through her employer. The policy had a $1,000 deductible and an 80/20 coinsurance clause with a $2,000 coinsurance cap. She had also accumulated 21 sick days (equivalent to one month) at work. Otherwise she had no long-term care or disability insurance. She was out of work for a total of 42 days. How much of Theresa's direct medical expenses was paid by her insurance policy? C How much income did Theresa lose?

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