What annual contributions to retirement fund

Assignment Help Financial Management

Reference no: EM131977543

If you invest $18,500 today, how much will you have in each of the following instances? Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. In 9 years at 10 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b. In 17 years at 10 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

c. In 18 years at 10 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

d. In 20 years at 10 percent (compounded semiannually)? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

2. You wish to retire in 13 years, at which time you want to have accumulated enough money to receive an annual annuity of $23,000 for 18 years after retirement. During the period before retirement you can earn 9 percent annually, while after retirement you can earn 11 percent on your money.

What annual contributions to the retirement fund will allow you to receive the $23,000 annuity? Use Appendix C and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

3. Your father offers you a choice of $120,000 in 10 years or $45,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a-1. If money is discounted at 12 percent, what is the present value of the $120,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

a-2. Which offer should you choose?

$120,000 in 10 years

$45,000 today

b-1. Now assume the offer is $120,000 in 7 years or $45,000 today. What is the present value of the $120,000 at 12 percent for 7 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b-2. Now, which offer should you choose?

$45,000 today

$120,000 in 7 years

Reference no: EM131977543

Questions Cloud

What is the sharpe ratio for large stock portfolio : The mean annual return on T-bills if 3.95%. What is the Sharpe ratio for the large stock portfolio?

What is the value of six-month european call option : What is the value of a six-month European call option that strikes at $51? What is the delta of the call option at the beginning and in three months?

Estimate the price of the bond : Estimate the price of the bond. If the YTM declines by 25bp, what will be the new price?

Short-term cash in particular money market investment : The treasurer of a large corporation wants to invest $20 million in excess short-term cash in a particular money market investment.

What annual contributions to retirement fund : What annual contributions to the retirement fund will allow you to receive the $23,000 annuity?

What is the continuously-compounding interest rate : What is the continuously-compounding interest rate? What will be the value if the put option is American?

Compute the present value of each alternative : Assuming you could earn 9 percent annually, compute the present value of each alternative:

Identified related party relationships and transactions : Define related party and discuss the required disclosure of the identified related party relationships and transactions.

Determine the growth rate of dividends : Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. Determine the growth rate of dividends from 2011 to 2015.

User Account

All Pages