User Account

All Pages

Fv of the second annuity problem

Assignment Help Finance Basics
Reference no: EM133072277

1) Jor Amster is a young professional planning his future. He knows he needs to start saving (or investing) soon. But he also knows he doesn't have a lot of income right now. He expects his income - and so his ability to save - to rise over time.
So he makes this plan:
save $300/month for 2 years @2%
then save $400/month for 3 years @3%
then invest $1,000/month for 10 years @8%
Assume everything stays in one account, with rates of return rising for all his funds as given above. Also assume monthly compounding.
This is a compound problem:
Find the FV at the end of 24 months of that first ordinary annuity problem.
This FV then becomes a PV for the second annuity problem.
The FV of the second annuity problem becomes a PV for the third annuity problem.
If you never withdraw any funds from the account, if all funds earn the going rate of return for the time period, and if all of your savings are deposited at the end of each year, how much should you have in total at the end of 15 years?

Reference no: EM133072277

Questions Cloud

Reasons for the existence of the eurodollar market : What are the basic reasons for the existence of the Eurodollar market?
Describe your work placement objectives : Describe your work placement objectives and Describe the results that you achieved in relation to these objectives
Determine the value of a potential investment : Capital budgeting is the process to determine the value of a potential investment/project to a firm. That is, it weeds out good investments from the bad
Determine the total current assets as at December : The only other current assets were inventory and prepaid expenses of $25 million and $75 million respectively. Determine the total current assets as at December
Fv of the second annuity problem : 1) Jor Amster is a young professional planning his future. He knows he needs to start saving (or investing) soon. But he also knows he doesn't have a lot of inc
What would be the total cost per unit : What would be the total cost per unit (including both fixed and variable costs) assuming that Best Apple produces 10,000 units
What inflation rate is expected after year 1 : Due to a recession, expected inflation this year is only 3.25%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level ab
Estimate firm approximate wacc : Estimate your firm's approximate WACC; use the most recent year's debt ratio to find the weights of debt and equity. If your company issues preferred stock, for
Build a suitable user interface : Build a suitable user interface and implement event handling procedures that provide a basis for an interactive and user-friendly app

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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