User Account

All Pages

Mary has been working for university for almost 25 years

Assignment Help Finance Basics
Reference no: EM13478258

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.

Issue A:

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?

Issue B:

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%?

Issue C:

Mary sreplacement 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?

Issue D:

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: EM13478258

Questions Cloud

Kim hotels is interested in developing a new hotel in seoul : kim hotels is interested in developing a new hotel in seoul. the company estimates that the hotel would require an
The scampini supplies company recently bought a new : the scampini supplies company recently purchased a new delivery truck. the new truck cost 22500 and it is expected to
Find out how application pools will help to decrease costs : imagine you are working for a large international purchasing company that has just bought a growing local company that
An outline of how you have formulated your response to : you began the pre-writing step for a report for your boss on richard hackmans statement that using a team to complete a
Mary has been working for university for almost 25 years : mary has been working for a university for almost 25 years and is now approaching retirement. she wants to address
Write and briefly describe five-component model of : list and briefly explain the five-component model of an information system. how can you use them? why is mis one of the
Callaghan motors bonds have 10 years remaining to maturity : callaghan motors bonds have 10 years remaining to maturity. interest is paid annually the bonds have a 1000 par value
Analyze the ethical implications associated to government : information miningedward snowdens release of classified nsa documents revealed the governments top-secret program to
Central city construction ccc needs 3 million of assets to : central city construction ccc needs 3 million of assets to get started and it expects to have a basic earning power

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine the stocks required rate of return round the

nicks enchiladas incorporated has preferred stock outstanding that pays a dividend of 5 at the end of each year. the

  Discuss basic features of mutual funds

Discuss and explain the basic features of mutual funds, and note what they have to offer as in-vestment vehicles.

  What will be the effect on the level of checkable deposit

If a bank sells $10 million of bonds to the Fed to pay back $10 million on the discount loan it owes, what will be the effect on the level of checkable deposit?

  What was the dollar value of the underpricing associated

On August 19, 2004 Google issued its IPO of 19.2 million shares to the initial investors at $81.33 per share. The closing price of the stock that same day was $100.74. What was the dollar value of the underpricing associated with the Google IPO.

  What is the total carrying cost and the restocking cost

Auto Parts sells 1,200 electric parts per week and then reorders another 1,200 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $750, what is the total carrying cost and the restocking cost, respectively?

  Create equity statement for ulrich in two scenarios

Ulrich Inc.'s Articles of Incorporation authorize the firm to issue 500,000 shares of $5 par-value common stock, of which 325,000 shares have been issued. Create the equity statement for Ulrich.

  What could be the maximum payment to the preferred

Kuhns Corp. has 200,000 shares of preferred stock outstanding that is cumulative. The dividend is $3.00 per share and has not been paid for 3 years. If Kuhns earned $1 million this year, what could be the maximum payment to the preferred stockhold..

  Estimate the internal rate of return for the machine

If the project's cost of capital is 10 percent, would you recommend buying the machine? d. Estimate the internal rate of return for the machine.

  Relationship in future value factor and present value factor

What is the relationship between the future value factor for five years at 5 percent and the present value factor for five years at 5 percent?

  What is the dollar amount of dividends

Lee purchased a stock one year ago for $28. The stock is now worth $30, and the total return to Lee for owning the stock was 0.40. What is the dollar amount of dividends that he received for owning the stock during the year?

  Find the value per share of stock

Boehm Incorporated is expected to pay a $1.50 per share dividend at the end of the year is $1.50. The dividend is expected to increase at a constant rate of 7 percent each year.

  Discuss two factors that may affect a person''s credit score

Discuss two factors that may affect a person's credit score and apply the notion of moral hazard to your response.

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