Reference no: EM131718971

Q1. Your friend has just turned 50 years old, and has asked you for your advice. He is starting to think about retirement and would like to withdraw from the bank $15,000 per year for 15 years after he turns 65 years of age. How much does your friend have to deposit for the next 15 years to ensure that there is enough money to last for 15 years after he retires? The bank has a special retirement fund that will pay 6% per year for the first 15 years and 8% per year after your friend turns 65 years of age for retirement income. (Rounded to the nearest dollar)

$5,365

None of the other alternatives are correct

$4,911

$5,516

$6,259

Q2. Selden Co. purchases a factory and pays $5,000,000 cash and uses the factory to produce microchips and then a year later turns around and sells the building for the same amount it originally paid. (money is worth 8% compounded quarterly). Selden will record:

A loss on the sale

There is insufficient information to answer the question

Not record this as a sale until payment in full is received

Neither a gain nor a loss on the sale

A gain on the sale

Q3. Bob borrows $50,000 from the Mighty Bank today and the Bank requests her to repay her loan in four equal payments along with 12% interest. Each of the four payments must be paid at the end of the next three years. What is the amount of each payment? Please round to the nearest whole number.

$14,817 plus 12% interest

None of the other alternatives are correct

$20,818

$20,818 plus 12% interest

$14,817