Your grandfather left an inheritance for you of $100,00. However you can only drawdown on the investment as follows: years 1 - 3  $15,000 each year Years 4 - 6  $10,000 each year year   7       $25,000 Interest on the fund is 5%. a)  What is the present worth of this inheritance? b)  Due to high liquidity interest rate have dropped to 4%.  What will be the

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Q: Astrid makes an investment with a zero net present value. She pays $850 today, and receives $350 one…

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A: Future is uncertain and income will stop after some time, but some amount will be required to meet…

Q: You have just inherited $560,000. You plan to save this money and continue to live off the money…

A: Data given: PV=$ 560,000 FV=$ 1000,000 rate=4.83% p.a.

Q: Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will…

A: To determine the present value of the $120,000 that Larry Mattingly will receive in one year, given…

Q: A man is investing $3,000 at 8 1/4% simple interest to save for a new car. In how many years will he…

A: SIMPLE INTEREST FORMULA: A=P×1+RT WHERE, P=principal A=amount R=rate  T=time

Q: You have just inherited $560,000. You plan to save this money and continue to live off the money…

A: Present Value = pv = $560,000Interest Rate = r = 5.46%Future Value = fv = $1 million

Q: You just inherited some money, and a broker offers to sell you an annuity that pays $19,245 at the…

A: Present value (PV) could be a budgetary concept utilized to decide the current worth of future cash…

Q: Your friend has a trust fund that will pay her the following amounts at the given interest rate for…

A: Present value is the value of money today that is to be received in future.  Given, The amount that…

Q: How much of their annual income do you recommend the Martins hold in some form of liquid savings as…

A: Ideally One should save, should invest and should hold in liquid assets. All these contribute to a…

Q: Justin invests $2000 at time 0. He receives $6443 at time 1 and pays $4500 at time 2. Compute the…

A: Period Cash flows 0  $-2,000.00 1  $  6,443.00 2  $-4,500.00 A negative Sign represents a…

Q: . Your grandmother has established a trust fund that pays you $3,500 each year for 15 years. upon…

A: Given: CF=$3500t=15 yearsr=7% i.e 0.07

Q: If you purchase a residential rental property for 330000 that includes a building worth 135000 how…

A:

Q: 14. Your grandfather left you $40,000 when he died. You can invest the money to earn 9% per year. •…

A: An annuity is a financial product that provides a series of regular payments to an individual over a…

Q: Raymond just inherited RM12000. How much should Raymond deposit in an account earning 3% interest…

A: Present value of the security is the result of discounting the future value over the period of time.…

Q: at the reading of the will, you learn that your inheritance will allow you to receive the amount of…

A: Equivalent present value refers to the current value of an asset that will be present at some future…

Q: Consider the decision of whether to hold wealth as money or as an interest-earning asset that pays a…

A: The nominal interest rate is the rate that we get before any adjustments are made. The real rate is…

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A: Expected Return is that percentage of earnings which is earned by the investor from the project. It…

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A: Annuity:  An annuity is the series of payments which is received or paid for a certain period of…

Q: Your grandparents just gave you a gift of $3,000. You are investing this money for 10 years at 3…

A: Solution:- In simple interest method, amount of interest earned = Principal amount x Annual interest…

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A: Perpetuity is a stream of identical cash flows with no end. It is a type of payment that is both…

Q: End of year Cash flow 1 3200 2000

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Q: 2. Marjorie Yan recently retired from work and wants to use a portion of her retirement money for…

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Q: 2. By the conditions of a will, the sum of P25000 is left to a girl to be held in trust by her…

A: A cash flow statement is a financial statement that summarize all cash inflows a company receives…

Q: Thuan is expecting to inherit $117,000.00 6 years from now. The interest rate is ¡(4) = 11.450%.…

A: Amount in 6 years (P6) = $117,000 Quarterly interest rate (r) = 0.028625 (i.e. 0.1145 / 4) Quarterly…

Q: Consider an inheritance that pays the beneficiary an annuity of $750 that begins immediately (an…

A: Annuity = a = $750Number of Payment = n = 20Interest Rate = r = 3%Annuity for year 14 = $0Payment…

Q: You have just inherited $408,031. You plan to save this money and continue to live off the money…

A: Future Value: It is the tool used by companies, investors, or individuals for the computation of the…

Q: Michael receives from his great aunt three stores. He estimates that these will bring him money at a…

A: Details Available Annual Investment $1000 Interest Rate 4.50%   Concept of Investment value…

Q: You just received an inheritance of $123,456. How long would you need to leave it in an RRSP earning…

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Q: You have just received $175,000 from the estate of a long-lost rich uncle. If you invest all your…

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Q: Suppose that you expect to receive an inheritance of £10,000 in one year. You will want to put this…

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Q: You have junt inherited $248,876. You plan to save this money and continue to live oll the money…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

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A: In annuity due there are payments at the beginning of period so there one period extra interest in…

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A: Given that: Mr. .Jobs earn a net income of $200000 by paying $1100000 for an oil up to 10 years.…

Q: Margaret has an investment opportunity where she can receive cashflows as follows 1) $1000 end of…

A: Here, YearCash flows1 $1,000.002 $1,000.003 $1,100.004 $1,100.005 $1,200.008 $1,400.00Interest…

Reasons for Estate Planning

Planning is a process that helps decide in advance about future activities and operations. Planning helps to draft the procedures by identifying, analyzing, and designing how to work, when to work, by whom should be done, and what has to be done. It is the primary step followed by a person, business organizations, institutions, companies, etc.