Solution-How much will mary be able to spend each year for

How much will mary be able to spend each year for john

Assignment Help Managerial Accounting

Reference no: EM132979383

John is going to establish a University Fund for his daughter Mary, who has just been born. He plans to make the first deposit of $20,000 today and then annual deposits of $5,000 will be made until Mary's 17th birthday. Given the long term nature of the investment, John anticipates a 5% pa return. The money is transferred to an account for Mary on her 17th birthday and she will then withdraw the money in equal annual amounts for 5 years starting on her 18th birthday. Mary will only be able to earn 3% pa on her money.

Problem (i) How much money will be available on Mary's 17th birthday?

Problem (ii) How much will Mary be able to spend each year?

Reference no: EM132979383

Questions Cloud

How do journalize december closed bad debts expense : How do journalize December 31, 2021 Closed bad debts expense to income summary? Do put the date and name the line as "closed bad debts expense"

Describe the key types of competitive advantage : Describe the key types of competitive advantage. What is the competitive advantage of Mattel? Provide suggestions to manage identified risks at Mattel.

Discuss the advantages of approach based on activities : Discuss the advantages of 'approach based on activities' for management accounting information in the context of Preparing plans and budgets

Develop an industry-specific business system : Develop a baseline for costs as if the two companies remained inde-pendent. Make sure the baseline costs are consistent with the intrin-sic valuations

How much will mary be able to spend each year for john : Given the long term nature of investment, John anticipates a 5% pa return. The money is transferred to an account.How much will Mary be able to spend each year?

Responses about application of audit committee effectiveness : prepare the following responses about the application of audit committee effectiveness recommended by ASX Corporate Governance Council (CGC) principles

How capital rationing can be incorporated within npv method : The machine will cost £1 million and will have a scrap value of £200,000 at the end of useful. How capital rationing can be incorporated within the NPV method

Compute the net present value of the proposed investment : However, maintenance costs are expected to jump by P6,000 per month if the machine is acquired. Compute the net present value of the proposed investment

What is the effective annual rate of return of indices : The S&P/ASX Small Ordinaries index went from 2,800 to 3,222 over the same period. What is the effective annual rate of return on each of these indices?

User Account

All Pages

How much will mary be able to spend each year for john

Reference no: EM132979383

Reference no: EM132979383

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT