Mary has been working for a university for almost 25 years

Assignment Help Finance Basics

Reference no: EM13396248

1.Mary has been working for a university for almost 25 years and is now approaching retirement. She wants to address several financial issues before her retirement and has asked you to help her resolve the situations below. Her assignment to you is to provide a 4-5 page report, addressing each of the following issues separately. You are to show all your calculations and provide a detailed explanation for each issue.

2.For the last 19 years, Mary has been depositing $500 in her savings account , which has earned 5% per year, compounded annually and is expected to continue paying that amount. Mary will make one more $500 deposit one year from today. If Mary closes the account right after she makes the last deposit, how much will this account be worth at that time?

3.Mary has been working at the university for 25 years, with an excellent record of service. As a result, the board wants to reward her with a bonus to her retirement package. They are offering her $75,000 a year for 20 years, starting one year from her retirement date and each year for 19 years after that date. Mary would prefer a one-time payment the day after she retires. What would this amount be if the appropriate interest rate is 7%?

4.Mary’s replacement is unexpectedly hired away by another school, and Mary is asked to stay in her position for another three years. The board assumes the bonus should stay the same, but Mary knows the present value of her bonus will change. What would be the present value of her deferred annuity?

5.Mary wants to help pay for her granddaughter Beth’s education. She has decided to pay for half of the tuition costs at State University, which are now $11,000 per year. Tuition is expected to increase at a rate of 7% per year into the foreseeable future. Beth just had her 12th birthday. Beth plans to start college on her 18th birthday and finish in four years. Mary will make a deposit today and continue making deposits each year until Beth starts college. The account will earn 4% interest, compounded annually. How much must Mary’s deposits be each year in order to pay half of Beth’s tuition at the beginning of each school each year?

Reference no: EM13396248

Questions Cloud

The discharge of fsh and lh from gonadotropes in the : utilizing knowledge from your learning and assigned readings respond to the following questionsa how does mitosis

What activity during oocyte activation prevents penetration : utilizing knowledge from your learning and assigned readings respond to the following questions1 what activity during

Select an organization on which to conduct a swot analysis : select an organization on which to conduct a swot analysis. you may use the company you work for or research an

Describe why monopolist like media cable faces : suppose that media cable is a single-price monopolist in the market for cable in anywhere iowa. media has five

Mary has been working for a university for almost 25 years : 1.mary has been working for a university for almost 25 years and is now approaching retirement. she wants to address

Name the three elements of the skeletal system and provide : 1. explain how it might be possible for a person who is overweight and active to be healthier than a slim sedentary

You are required to use at least your textbook as source : you are required to use at least your textbook as source material. all sources used including the textbook must be

Cmpute the total cost marginal cost per unit average : joe browns dairy operates in a perfectly competitive marketplace. joes machinery costs 500 per day and is the only

Describe the origin principles and assessment of validity : discuss at least 3 examples of how this theory would be used in the application of ldquoskills and techniques

User Account

All Pages