Determining the value of the ira

Assignment Help Finance Basics
Reference no: EM132689295

1. Hector's parents anticipate needing $80,000 when he is 18 for his college education.

a. If he is 5 years old now, how much should they invest in an investment plan that pays 6.23% compounded quarterly?

b. Hector ended up getting a full scholarship. His parents agreed to let him draw the interest off the investment account each quarter (3 months) for expenses. How much will Hector receive each quarter?

2. Meagan invests $1,200 each year in an IRA for 12 years in an account that earned 5% compounded annually. At the end of 12 years, she stopped making payments to the account, but continued to invest her accumulated amount at 5% compounded annually for the next 11 years.

a. What was the value of the IRA at the end of 12 years?

b. What was the value of the investment at the end of the next 11 years?

Reference no: EM132689295

Questions Cloud

What is the duration for five-year bond : What is the duration for each five-year bond? A manager of a commercial bank's security portfolio is analyzing three bonds and is using duration
Analyze marketing decision support systems : Assess the key factors, such as demographic, economic, natural, technological, political, and cultural developments, that affect marketing strategies
Contrast the features of the retirement plans : Discuss and contrast the features of the retirement plans offered by Analytical Solutions and Precision Manufacturing.
Determine current position in the life cycle : Determine its current position in the life cycle. Find current two industry leaders related to this product and share each mission statement available
Determining the value of the ira : 1. Hector's parents anticipate needing $80,000 when he is 18 for his college education.
Describe your experience as a new boss and new manager : Describe your experience as a new boss, new manager - or new employee. (Was it similar/dissimilar to Hill's article?) Connect Hill's observations to Kegan.
What is securitization : What is securitization and why do financial institutions employ it?
Describe the process of aligning organizational strategic : Discuss and describe the process of aligning organizational strategic objectives and individual performance. what are the benefits of alignment?
Fundamental analysis of security analysis : Explain the following in details which are the fundamental analysis of security analysis? Industry analysis

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute the price of the bond if the required return

To finance a new line of product, Larissa Toys has issued a bond with a par value of $1,000, coupon rate of 8 percent, and maturity of 30 years.

  Construct a replicating portfolio

A European put option written on stock has strike price $12 and expires at time t = 1. At the current time t = 0 the underlying stock has price

  Show the proper entries for granting the loan

Relgade National Bank secures primary credit from the Federal Reserve Bank of San Francisco in the amount of $32 million for a term of seven days.

  Increased the number of times that the interest

If it is increased the number of times that the interest be composed during a period , the terminal value of a quantity will be lower: True or False

  In a classified balance sheet assets are usually classified

in a classified balance sheet assets are usually classified asa current assets long-term assets property plant and

  How does a firm leverage its capital structure

How does a firm ‘‘leverage'' its capital structure? When is leverage advantageous? When is it disadvantageous? Who receives the advantage or bears the disadvantage of leverage?

  Compute the firm’s cost of retained earnings

Suppose the current risk-free rate of return is 3.5 percent and the expected market return is 9 percent. Fashion Faux-Pas' common stock has a beta coefficient equal to 1.4. Using the CAPM approach, compute the firm's cost of retained earnings.

  A neutral effect on the spread value

Consider a riskless spread with a long position in the August 160 call and a short position in the October 160 call. Determine the appropriate hedge ratio.

  Why short-term project that you have chosen might be ranked

fin 534- Analyze the reasons why the short-term project that you have chosen might be ranked higher under the NPV criterion if the cost of capital is high, while the long-term project might be deemed better if the cost of capital is low.

  Prepare a trial balance with the list of accounts

Below is the complete list of accounts of Fightin' Blue Hens Incorporated and the related balance at the end of March. All accounts have their normal debit.

  What is the net present value of the cash flows

What is the net present value (NPV) of the cash flows associated with a project that costs $2,000, but is expected to generate $500, $250, $750 and $1, 080.

  What will be the percentage return on your investment if

you purchase 100 shares for 50 a share 5000 and after a year the price rises to 60. what will be the percentage return

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd