Cindy houston has a 41200 debt that she wishes to repay 4

Reference no: EM13484098

Consider the following independent situations.

(a) Mark Yoders wishes to become a millionaire. His money market fund has a balance of $403,884 and has a guaranteed interest rate of 12%. How many years must Mark leave that balance in the fund in order to get his desired $1,000,000?

(b) Assume that Elvira Lehman desires to accumulate $1 million in 15 years using her money market fund balance of $209,004. At what interest rate must Elvira's investment compound annually? (Round answer to 0 decimal places, e.g. 5%.)

(c) Your client, Wyeth Leasing Company, is preparing a contract to lease a machine to Souvenirs Corporation for a period of 28 years. Wyeth has an investment cost of $462,298 in the machine, which has a useful life of 28 years and no salvage value at the end of that time. Your client is interested in earning an 12% return on its investment and has agreed to accept 28 equal rental payments at the end of each of the next 28 years.

You are requested to provide Wyeth with the amount of each of the 28 rental payments that will yield an 12% return on investment. (Round answers to 0 decimal places, e.g. $458,581.)

(a) What is the amount of the payments that Ned Winslow must make at the end of each of 9 years to accumulate a fund of $92,580 by the end of the 9th year, if the fund earns 9% interest, compounded annually? (Round answers to 0 decimal places, e.g. $458,581.)

(b) Robert Hitchcock is 42 years old today and he wishes to accumulate $576,500 by his 64th birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 42nd through his 63rd birthdays. What annual deposit must Robert make if the fund will earn 10% interest compounded annually? (Round answers to 0 decimal places, e.g. $458,581.)

(c) Diane Ross has $22,600 to invest today at 10% to pay a debt of $53,290. How many years will it take her to accumulate enough to liquidate the debt?

(d) Cindy Houston has a $41,200 debt that she wishes to repay 4 years from today; she has $28,140 that she intends to invest for the 4 years. What rate of interest will she need to earn annually in order to accumulate enough to pay the debt?

Reference no: EM13484098

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