Reference no: EM1362683
1. Mr. Miser, who is 35 years old, has just inherited $11,000 and decides to use the windfall towards his retirement. He places the money in a bank which promises a return of 6% per year until his planned retirement in 30 years. If his funds earn 6% interest compounded annually, how much will he have at retirement? Repeat the analysis for both semi-annual and continuous compounding.
2. An investment today of $3,300 is worth $10,000 in 8 years. At what rate has your investment been growing (annually) over the 8 years?
3. Joe, a freshman in college, needs $55,000 in 4 years to buy the car of his dreams. If his investments earn 6% interest per year, how much must he invest today to have that amount at graduation? If he invested once a year for four years beginning today until the end of the 4 years how much must he invest?
4. As the winner of the Housecleaners sweepstakes, you are entitled to one of the following prizes:
A. $999,999 immediately.
B. $100,000 per year forever.
C. $180,000 per year for the next 10 years starting immediately.
D. $400,000 payable every 2 years over 20 years.
E. $ 70,000 per year forever.
5. Your aunt, in her will, left you the sum of $5,000 a year forever with payments starting immediately. However, the news is better. She has specified that the amount should grow at 5% per year to maintain purchasing power. Given an interest rate of 12%, what is the PV of the inheritance?
6. If you invest $100,000 today at 12% per year over the next 15 years, what is the most you can spend in equal amounts out of the fund each year over time.
7 . Given the following set of spot rates: Year 1: Spot Rate= .050; Year 2: Spot Rate = .054; Year 3: Spot Rate = .059; Year 4: Spot Rate = .066. Calculate the 1-year forward rates over each of the next 3 years.
8. Given the opportunity to invest in one of the three bonds listed below, which would you purchase? Assume an interest rate of 7%.
Bond Face Annual Maturity Price
value coupon rate
A 1000 4% 1 year 990
B 1000 7.5% 17 years 990
C 1000 8.5% 25 years 990
9. The Walker Landscaping Company can purchase a piece of equipment for $3,600. The asset has a two-year life, will produce a cash flow of $600 in the first year and $4,200 in the second year. The interest rate is 15%. Calculate the project's Discounted Payback and Profitability Index assuming steady cash flows. Should the project be taken? If the Average Accounting Return was positive, how would this affect your decision?
|
Explain elements of conflict resolution and peacemaking
: Explain elements of conflict resolution and peacemaking and Format your paper consistent with APA guidelines.
|
|
Active versus passive investors
: You are preparing taxes for Tim, a business investor, and must calculate his adjusted gross income. Tim invested $10,000 in a business (only slightly less than the other investors) but is claiming a loss of $24,000.
|
|
Illustrate which offers the higher expected return
: Illustrate which offers the higher expected return. If you expect the rate of inflation to be 3% over the next year, which is the better investment.
|
|
Commonly found major micronutrients
: Discuss one of the major micronutrients (vitamin or mineral) other than Carbohydrates, Lipids, Protein, and Fiber? In what foods is this micronutrient commonly found? What are the negative effects if you don't get enough? What if you get too much?
|
|
Semi-annual and continuous compounding
: Mr. Miser, who is 35 years old, has just inherited $11,000 and decides to use the windfall towards his retirement. He places the money in a bank which promises a return of 6 percent per year until his planned retirement in 30 years.
|
|
Investments in internetworking solutions
: Cisco Systems, Inc., is the world's leading supplier of internetworking solutions targeted at corporate enterprise intranets and the internet. Using the instructions below, access Ciscos 2011 Annual Report.
|
|
Show jury member''s negotiations style
: What is this jury member's negotiations style and strategy and is it successful or unsuccessful with certain jury members and why?
|
|
Discussion and analysis of financial condition
: Accessing the MD&A Management's Discussion and Analysis of Financial Condition and Results of Operation from the company's most recent Annual Report or Form 10-K,
|
|
People and organization responsible for bumping problems
: Answer from the perspective of the airlines and from the perspective of the customers. What people, organization, and technology factors are responsible for excessive bumping problems?"
|