How much should be the serial payment

Assignment Help Financial Management

Reference no: EM13721838

Mary wants to accumulate $45,000 in today's dollar terms in the next 6 years. She expects to earn a return of 6.25% per year and inflation is expected to be 1.75%.

A) How much should be the serial payment in the 1st year so that Mary can achieve the target?

$6713; $6523; $7133; or $6830

B) How much should be the serial payment in the 2nd year so that Mary can achieve the target?

$6637; $7258; $6830; or $6950

C) How much should be the serial payment in the 5th year so that Mary can achieve the target?

$7645; $7196; $7321; or $6991

Reference no: EM13721838

Questions Cloud

Programmed and non-programmed decisions : Question 1: What techniques or tools can managers use to improve programmed and non-programmed decisions?

Equal nominal annual payments : You take out a loan for $16101 that has equal nominal annual payments over the next five years. The real rate of return on the loan is 3.9%, and the annual inflation rate is 2.1%. What will the payments be?

The bonds make semi-annual payments : Watters Umbrella Corp. issued 20-year bonds 2 years ago at a coupon rate of 6.4 percent. The bonds make semi-annual payments. If these bonds currently sell for 110 percent of par value, what is the YTM?

What is a D. total marketable investment : D. has $750 in cash, $2000 in savings account, $34,300 in stocks, $5,500 in bonds, and owns a car worth $15,500. She had $1,500 in credit card payments and an education loan of $24,000 of which $2,700 is due during the current year. What is a D. tota..

How much should be the serial payment : Mary wants to accumulate $45,000 in today's dollar terms in the next 6 years. She expects to earn a return of 6.25% per year and inflation is expected to be 1.75%. How much should be the serial payment in the 1st year so that Mary can achieve the tar..

Statistics for a households annual cash flow : Consider the following statistics for a household's annual cash flow: Net Cash Flow ($3,400) ; Nondiscretionary Expenses ($32,750); Discretionary Expenses ($9,250); Retirement Investments ($13,500) and Debt Repayment ($4750). Calculate the Gross Savi..

What is the value problem : What is the value today of a 15-year annuity that pays $650 a year? The annuity’s first payment occurs six years from today. The annual interest rate is 11 percent for Years 1 through 5, and 13 percent thereafter.(Do not round intermediate calculatio..

What is the future value and loan problem : What is the future value of $1800 invested today at 18% interest in 30 years with interest compounded quarterly? What is the present value of $6700 received 14 years from now using on the 11% interest or discount read with interest compounded quarter..

Assume that the contract value had not increased : Sophia purchased a variable annuity contract with $50,000 purchase payment. Surrender charges begin with 7 percent in the first year and decline by 2 percent each year. In addition, Sophia can withdraw 10 percent of her contract value each year witho..

User Account

All Pages