Personal Finance, Student Value Edition (8th Edition) (The Pearson Series in Finance)
8th Edition
ISBN: 9780134730851
Author: Arthur J. Keown
Publisher: PEARSON
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Chapter 15, Problem 3DC2
Summary Introduction
To determine:
Will T & M choose the lump sum payment or
Introduction:
Annuity is the mode of payment made at continuous interval to the individual or spouse during the life of the individual. The annuity amount is remaining same at every payment it does not change with the change in inflation rate.
Lump sum payment
in this an individual receive the amount of retirement in one single payment. In nutshell, the person who is spending amount at the time of employment for the retirement benefit, receives a single amount at the time of retirement instead of annuity payment.
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Students have asked these similar questions
The maturity value of an $35,000 non-interest-bearing, simple discount 4%, 120-day note is:
Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,905 at 10% for 4 years. Use ordinary interest as needed.
Calculate the simple interest note proceeds.
Calculate the simple discount note proceeds.
What you're solving for
Solving for maturity value, discount period, bank discount, and proceeds of a note.
What's given in the problem
Face value:
$55300
Rate of interest:
10%
Length of note:
95
days
Date of note: August 23rd
Date note discounted: September 18th
Bank discount rate:9 percent
Chapter 15 Solutions
Personal Finance, Student Value Edition (8th Edition) (The Pearson Series in Finance)
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