Determine the accumulated amount of her investment

Assignment Help Financial Management

Reference no: EM13917284

Emily is in the 25% bracket and has $15,000 available for investment during her current tax year. Assume that she remains in the same tax bracket over the next 7 years and determine the accumulated amount of her investment if she puts the $15,000 into the following.

(a) a tax-deferred annuity that pays 5%/year (compounded annually), tax deferred for 7 years

$ ____________ (after taxes)

(b) a taxable instrument that pays 5%/year (compounded annually) for 7 years (Hint: In this case, the yield is 3.75%/year.)

$ ____________

Please solve using calculus, not charts

Reference no: EM13917284

Questions Cloud

What is steves total return on these three stocks : Steve placed an order with his broker to purchase 500 shares of each of three IPOs that are being released this month. Each IPO has an offer price of $20 a share. What is Steve's total return on these three stocks as of the end of the first day of tr..

What is the variance of a portfolio composed : Stock A has exhibited a standard deviation in stock returns of 0.5, whereas Stock B has exhibited a standard deviation of 0.6. The correlation coefficient between the stock returns is 0.5. What is the variance of a portfolio composed of 70 percent St..

Positive taxable income and assets book value exceeds : The net cash flow from the sale of an asset will exceed the asset's sale price when a firm has positive taxable income and the asset's book value exceeds its market value.

Does this imply less price risk-volatility in long-term bond : Historical data on term structure suggests that short-term interest rates are more volatile than longer-term rates. Does this imply less price risk and volatility in long-term bonds?

Determine the accumulated amount of her investment : Emily is in the 25% bracket and has $15,000 available for investment during her current tax year. Assume that she remains in the same tax bracket over the next 7 years and determine the accumulated amount of her investment if she puts the $15,000 int..

Shares of stock will firm distribute result of dividend : Ziegler's has the following equity account balances: common stock of $42,000 with a $1 par value, capital surplus of $228,000, and retained earnings of $509,000. The stock has a market value of $38 a share. Assume the company issues a 20 percent stoc..

How much will the liquidation dividend be per share : Presto Cleaners recently liquidated its retail dry cleaning unit. That unit represented 35 percent of the firm's overall market value. Prior to the liquidation, the firm's stock was selling for $28 a share and there were 7,000 shares outstanding. The..

Estimate of the firms next annual dividend payment : Medical Devices just paid its annual regular cash dividend of $1.90 a share, along with a special dividend of $0.60 a share. The company follows a policy of increasing its dividend by 3 percent annually. Which one of the following is the best estimat..

Flotation cost percentage of funds provided by investors : Douglass Trucking issued 120,000 shares of stock last week. The underwriters charged an 8.5 percent spread in exchange for agreeing to a firm commitment. The legal and accounting fees amounted to $395,000. What was the flotation cost as a percentage ..

User Account

All Pages