What annual interest rate-save any additional funds

Assignment Help Financial Management
Reference no: EM131012192

Your parents will retire in 20 years. They currently have $230,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.

Reference no: EM131012192

Questions Cloud

Financial calculators do not operate in this way : If we input a positive PV in our calculator, we get a negative FV if that is what we are solving for. The reverse it true as well. Put in a positive, and the answer is negative. This is true of all financial calculators and is referred to as the ____..
External factor of economic conditions can be overcome : If the organization has the supplies it needs then functions of the employees are not hinders however, if supplies are scarce, then staff will not be able to perform duties to the best of their ability and clients will be unsatisfied hence the org..
Error between duration prediction and actual market values : MLK Bank has an asset portfolio that consists of $200 million of 15-year, 12.5-percent-coupon, $1,000 bonds with annual coupon payments that sell at par. a-1. What will be the new prices if market yields change immediately by ± 2.00 percent? What is ..
What was your personal response to the song : What was your PERSONAL response to the song? How does what you saw, heard and felt connect to the materials you've read in class
What annual interest rate-save any additional funds : Your parents will retire in 20 years. They currently have $230,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer..
Sharp decline in cash is puzzling : As can be seen from the following statements, only $22,000 in cash was available at the end of 2015. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to ..
Determine the gross water supply reservoir volume : Determine the gross water supply reservoir volume for the following information: City population: 200,000 Water consumption rate: 568 Lpcd Catchment area: 103 Km^2 Rainfall rate: 110cm/yr Annual soil evaporation: 50cm Minimum net reservoir volume:..
Using the method of comparables : Use all of the above data to estimate the value of Macy’s shares. One problem above is the negative EPS (i.e. loss) by JC Penney. What should you do if you have negative earnings for a comparable firm? using the “Method of Comparables”, what would yo..
Statement about flexibility-cost and riskiness of short term : Statements about the flexibility, cost and riskiness of short-term versus long term debt depend to a large extent on the type of short-term financing that is actually used. Three major types of short-term financing--accruals, accounts payable and ban..

Reviews

Write a Review

Financial Management Questions & Answers

  Primary equity interest only debt

The residual position (the portion retained by the issuer) in the CMO offering is considered which kind of position? Primary Equity Interest only Debt

  Discounted payback

A project has an initial cost of $35,000, expected net cash inflows of $8,000 per year for 7 years, and a cost of capital of 11%. What is the project's discounted payback period?

  Coupon bond and a zero-coupon bond

If a coupon bond and a zero-coupon bond both have the same yield and the same maturity, will they both have the same duration? If yes then explain why. If no then explain which one will have a lower duration and why?

  About the cash conversion cycle

Primrose Corp has $19 million of sales, $2 million of inventories, $4 million of receivables, and $2 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 6% rate. What is Primrose's cash c..

  What is the discounted payback period at discount rate

A project has an initial cash outflow of $1,110 and cash inflows of $315 per year for 4 years. What is the discounted payback period at a discount rate of 9.1 percent?

  What is the proportion of equity in capital structure

Jack’s Construction Co. (JCC) has 80,000 bonds outstanding that are currently selling at par (face) value. Bonds with similar characteristics are currently yielding 8.5%. The company also has 4 million shares of common stock outstanding. What is the ..

  What is the length of the cash cycle

BCD Corporation has an inventory turnover of 16 and an accounts payable turnover of 11. The accounts receivable period is 36 days. What is the length of the cash cycle?

  What is the break-even level of ebit for plan

Cooke Co. is comparing two different capital structures. Plan I would result in 9,000 shares of stock and $360,000 in debt. Plan II would result in 12,600 shares of stock and $216,000 in debt. The interest rate on the debt is 9 percent. compare both ..

  What is the net present value of the asset

A company is considering purchasing an asset for $60,000 that would have a useful life of 5 years and would have a salvage value of $7,000. For tax purposes, the entire original cost of the asset would be depreciated over 5 years using the straight-l..

  How much cash does the company have

Saunders Corp. has a book net worth of $13,430. Long-term debt is $8,650. Net working capital, other than cash, is $3,305. Fixed assets are $17,830 and current liabilities are $1,810. How much cash does the company have? What is the value of the curr..

  What is expected relation between relative interest rates

Effects of real interest rates. What is the expected relationship between the relative real interest rates of two countries and the exchange rate of their currencies?

  What must be the opportunity cost of capital

A stock sells for $60. The next dividend will be $3 per share. If the return on equity ROE is a constant 10% and the company reinvests 40% of earnings in the firm, what must be the opportunity cost of capital?

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd