Your father has promised to give you Rs 2,00,000 in cash on your 30th birthday, today is your 21st birthday. He wants to know the following things: If he decides to make annual payments into a fund after one year, how much will each have to be if the fund pays 8 %? If he decides to invest a lump sum in the account after one year and let it compound annually, how much will the lump sum be? If he decides to invest a lump sum in the account now and let it compound annually, how much will the lump sum be? Assume 8% rate of interest in each case.

Q: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and…

A: Variables in the question:Annual payment (P)=$1000Growth (g)=8%Interest rate(r)=11%

Q: Suppose your parents decide to give you $10,000 to be put in a college trust fund that will be paid…

A: Present value = $10,000 Interest rate per period, r = 1.5% Number of compounding periods, n = 5 × 4…

Q: A rich aunt has promised you 6000 one year from today. In​ addition, each year after​ that, she has…

A: This question can solved on the basis on Net Present Value Method (NPV)

Q: On a child's first birthday, a parent wishes to deposit enough money so that the child can withdraw…

A: Present Value of annuity = Annual payments * PVAF(rate, number of years) Present Value = Future…

Q: You have just celebrated your birthday. Your uncle, has set up a trust fund for you, which will pay…

A: Present value: It can be defined as today’s worth of an investment that will be received in the…

Q: Jerry wants to take the next three years off work to travel around the world. He estimates his…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Bill O’Brien would like to take his wife, Mary, on a trip three years from now to Europe to…

A: Future value:

Q: artin wants to provide money in his will for an annual bequest to whichever of his living relatives…

A: The present value of growing perpetuity is calculated by

Q: Donald will receive $450,000 from his trust fund in 20 years from today. He assumes he could get a…

A:

Q: Your parents would like to establish a trust fund that would pay annual payments to you and your…

A: In this question we require to calculate the present value of perpetuity as we will receive $500000…

Q: The pipe guy plans to deposit $78,000 into an investment each year for the next 10 years so he can…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: John and Denise are partners at a law firm. They have decided to set aside a fund for their loyal…

A: Compound = Monthly = 12Time = t = 10 * 12 = 120John Payment = jp = $100Interest Rate = r = 10 / 12 %

Q: Syariqul Haq is trying to save up for a big vacation. He plans to take a trip around Japan when he…

A: Future value  The future value indicates the value of a current investment over a specified period…

Q: Thomas Finley wishes to become a millionaire. His money market fund has a balance of $183,204 and…

A: A money market fund is mutual fund that invests in liquid financial instruments. These instruments…

Q: Janet Lopez wishes to establish a trust fund from which her son can withdraw $15,000 every six…

A: The objective of the question is to find out the initial amount that Janet needs to deposit in the…

Q: nim to receive $3000 each month for 5 years, beginning 18 4.2% p invest the money today in an…

A: Here we will use the concept of time value of money to answer the questions.

Q: The Mellows have decided to invest in a college fund for their young son. They invested $30,000 in a…

A: Rate The interest rateNper  The total number of payments Pmt Payment per periodPv  The present…

Q: Your favorite uncle wants to give each of his favorite nieces and nephews $30,000 now while he is…

A: First, convert R as a percent to r as a decimalr = R/100r = 10/100r = 0.1 rate per year,Then solve…

Q: Your father is considering purchasing an annuity that pays $5,000 at the beginning of each year for…

A: The objective of the question is to find out the present value of an annuity that pays $5,000 at the…

Q: If Pete has $1,000 and invests it into a mutual fund that returns 10%, what will be his Future Value…

A: Future value is expected value at a certain date in future at given rate of interest. Given: Present…

Q: Mr. and Mrs. Megabucks would like to set up a college fund for their grandson. They want him to be…

A: Given: N = 24, FV = 0, PMT = 1750, rate = 2.4%/12 = 0.2

Q: Suppose you want to use this fund to buy a $346,000 houseboat when you retire in 40 years. How much…

A: Future value = $346,000  Interest rate = 4.75% compounded monthly Period = 40 years  Payments are…

Q: Allen is planning for his retirement pension fund. He expects to receive £20,000 a year for 30 years…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…