Foundations Of Financial Management
17th Edition
ISBN: 9781260013917
Author: BLOCK, Stanley B., HIRT, Geoffrey A., Danielsen, Bartley R.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 9, Problem 35P
Summary Introduction
To calculate: The
Introduction:
The current value of an investment or asset is termed as its present value. It is calculated by discounting the
Annuity:
When payments are made or received in a series at equivalent intervals, they are termed as an annuity. Such payments can be made weekly, monthly, quarterly, or annually.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
John Jones has just retired after many years with the telephone company. His pension funds have a total value of $180,000 and actuaries state that his life expectancy is fifteen more years. The manager of his pension fund says he can earn a 9% return on John's assets. What will be John's yearly annuity for the next fifteen years?
Una Day is planning to retire in 20 years, at which time she hopes to have accumulated enough money to receive an annuity of $35,000 a year for 25 years of retirement. During her pre-retirement period she expects to earn 9 percent annually, while during retirement she expect to earn 11 percent annually on her money.
What amount will be needed in 20 years (at time of retirement).
What amount of annual contributions to the retirement fund are required for to achieve her objective and sleep well at night?
If she currently earns $35,000 a year will this amount be enough in retirement 20 years from now (briefly explain – no calculations are required).
Janice is hoping to save $200,000 by the time she retires in 20 years. How much must Janice deposit annually at the end of each year to reach this retirement goal on December 31, Year 20, assuming she can earn a 4% annual rate of return on her retirement account?
Chapter 9 Solutions
Foundations Of Financial Management
Ch. 9 - Prob. 1DQCh. 9 - How is the present value of a single sum related...Ch. 9 - Prob. 3DQCh. 9 - Does inflation have anything to do with making a...Ch. 9 - Adjust the annual formula for a future value of a...Ch. 9 - If, as an investor, you had a choice of daily,...Ch. 9 - What is a deferred annuity? (LO9-4)Ch. 9 - Prob. 8DQCh. 9 - Prob. 1PCh. 9 - Prob. 2P
Ch. 9 - a. What is the present value of $140,000 to be...Ch. 9 - If you invest $9,000 today, how much will you have...Ch. 9 - Prob. 6PCh. 9 - Your uncle offers you a choice of $105,000 in 10...Ch. 9 - Your father offers you a choice of $105,000 in 12...Ch. 9 - Prob. 9PCh. 9 - How much would you have to invest today to receive...Ch. 9 - If you invest $8,500 per period for the following...Ch. 9 - Prob. 12PCh. 9 - Mrs. Crawford will receive $7,600 a year for the...Ch. 9 - Phil Goode will receive $175,000 in 50 years. His...Ch. 9 - Sherwin Williams will receive $18,500 a year for...Ch. 9 - Carrie Tune will receive $19,500 for the next 20...Ch. 9 - The Clearinghouse Sweepstakes has just informed...Ch. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - At a growth (interest) rate of 10 percent...Ch. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Juan Garza invested $20,000 10 years ago at 12...Ch. 9 - Prob. 26PCh. 9 - Prob. 27PCh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - You need $28,974 at the end of 10 years, and your...Ch. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 33PCh. 9 - Prob. 34PCh. 9 - Prob. 35PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Del Monty will receive the following payments at...Ch. 9 - Prob. 39PCh. 9 - Prob. 40PCh. 9 - Prob. 41PCh. 9 - Prob. 42PCh. 9 - Prob. 43PCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Your younger sister, Linda, will start college in...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Una Day is planning to retire in 14 years, at which time she hopes to have accumulated enough money to receive an annuity of $17,000 a year for 19 years of retirement. During her pre-retirement period she expects to earn 8 percent annually, while during retirement she expects to earn 10 percent annually on her money. What annual contributions to this retirement fund are required for Una to achieve her objective and sleep well at night? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Annual contribution $ 7,422 xarrow_forwardA civil engineer planning for her retirement places 11% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $180,000 and she expects her salary to increase by 2% each year, what will be the future worth of her retirement fund after 13 years provided it earns 11% per year? The future worth of her retirement fund will be whatarrow_forwardAmy Johnson wants to retire on $75,000 per year for her life expectancy of 20 years after she retires. She estimates that she will be able to earn an interest rate of 10.1%, compounded annually, throughout her lifetime. To reach her retirement goal, Amy will make annual contributions to her account for the next 30 years. One year after making her last deposit, she will receive her first retirement check. How large must her yearly contribution be? (Solve with Presents Values with Annuities or Loans and Amortization)arrow_forward
- Una Day is planning to retire in 11 years, at which time she hopes to have accumulated enough money to receive an annuity of $21,000 a year for 16 years of retirement. During her pre-retirement period she expects to earn 12 percent annually, while during retirement she expects to earn 14 percent annually on her money. What annual contributions to this retirement fund are required for Una to achieve her objective and sleep well at night? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Annual contribution $arrow_forwardA civil engineer planning for her retirement places 11% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $160,000 and she expects her salary to increase by 2% each year, what will be the future worth of her retirement fund after 17 years provided it earns 11% per year?arrow_forwarda young woman plan to retire 30 years. She intends to contribute the same amount of money each year to her retirement fund. The fund earns 10% compounded annually. She would like to withdraw $100,000 each year for 20 years, starting 1 year after the last contribution is made. Approximately how much money should she contribute to her retirement fund each year.arrow_forward
- Mary plans to make the following contributions to her retirement account: $10,000 for each of the next ten years, and $12,000 for each of the ten years after that. If her savings earn 5%, how much will she have at the end of the 20 years. Ignore taxes and assume that the contributions are made at the end of the year.arrow_forwardMargaret has $650 000 in her RRSP and wishes to retire.She is thinking of using the funds to purchase an annuity that earn 5% compounded annually and pays her $3 700 at the end of each month.If she buys the annuity for how long in years and months will she receive the payments?arrow_forwardLin Shan is about to retire and is exploring the possibility of investing a lump sum in an annuity so that she gets 50% of her last drawn salary at the end of every month for 15 years. She estimates her last-drawn salary to be ¥60,000. The quotation she obtained from Ping Tan insurance requires her to invest a lump sum of ¥1 million. Calculate the return that Lin Shan is earning on her annuity.arrow_forward
- An engineer planning for her retirement will deposit 15% of her salary each year into a stock fund. If her salary this year is $88000(end of year 1) and she expects her salary to increase by 12% each year, what will be the future worth of the fund after 16 years if it earns 10% per year?arrow_forwardSuppose your mother has worked for 40 years and has accumulated $1,000,000. She wishes to begin receiving an annual payment beginning next year, and continuing for another 20 years. If a pension plan will guarantee her an annual interest rate of at least 5% effective, what is her payment?arrow_forwardPlease help.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning