How much money will you need in bank at the start of trip

Assignment Help Financial Management

Reference no: EM131303541

Ten years from now, you plan on taking a year's unpaid vacation to sail from Hawaii to Australia. You estimate that expenses, e.g., boat, crew, provisions, etc., will be $5000 per month over the 12-month journey. The APR is 8.4%, compounded monthly. Assume that each payment is made at month’s end.

(a) How much money will you need in the bank at the start of the trip in order to withdraw $5000 per month for expenses?

(b) What lump sum should you deposit in the bank today so that you will have enough money ten years from now for your trip?

(c) The lump sum deposit in part (b) is out of the question given your current financial state. Instead, you believe that a systematic monthly savings plan is better. How much should you deposit monthly to insure sufficient funds in ten years for your trip?

Reference no: EM131303541

Questions Cloud

Company marginal and average tax rates on taxable income : To complete the assignments listed below, refer to the Table 2-1. The Talley Corporation had a taxable income of $335,000 from operations after all operating costs but before: interest charges of $67,000, What are the company's marginal and average t..

How rapid population growth can limit a nation’productivity : Explain how rapid population growth can limit a nation's productivity. Are there any ways in which population growth can have a positive economic effect? Explain. Source: "2008 World Population Data Sheet," Population Reference Bureau, August 19, ..

Compute the average time a student spends : Compute the average time a student spends in the waiting line. Students have complained to the registrar about the length of time they must wait to have their schedules approved.

What is the bond''s after-tax yield : An investor recently purchased a corporate bond which yields 10.5%. The investor is in the 36% combined federal and state tax bracket. What is the bond's after-tax yield? Corporate bonds issued by Johnson Corporation currently yield 11%. Municipal bo..

How much money will you need in bank at the start of trip : Ten years from now, you plan on taking a year's unpaid vacation to sail from Hawaii to Australia. You estimate that expenses, e.g., boat, crew, provisions, etc., will be $5000 per month over the 12-month journey. How much money will you need in the b..

Why health care workers are not receiving the vaccination : Your research design should focus on determining why health care workers are not receiving the vaccination for your selected vaccine-preventable disease in their place of employment.

Determine the maximum distance the boat : The motion of a 6500-lb boat is arrested using a bumper which provides a resistance as shown in the graph. Determine the maximum distance the boat dents the bumper if its approaching speed is . 3 ft/s

How much more is nancys cash flow worth : Mary is going to receive a 32-year annuity of $8,700. Nancy is going to receive a perpetuity of $8,700. If the appropriate interest rate is 10 percent, how much more is Nancy’s cash flow worth?

Determine a healthcare organizations strategic position : Identify the industry your organization is a part of and title your map appropriately.- Identify the appropriate axis labels to use on your map, such as price vs. breadth of product mix.

User Account

All Pages