What is the dollar amount of the required deposits

Assignment Help Financial Management

Reference no: EM131869267

One expert answered this question but only copied the answers from Chegg without checking. Meanwhile, the answers are off from from the textbook solutions.

NOTE: These are the answers but I dont know how they arrived there. Please help solve and show me how? thank you

a. $4,052 b. $3,670.38 c. (i) $2,284.87 (ii) $10,084.87 d. (i) $2,384.55 (ii) $15,319.48

A 22-year old engineering graduate wants to accumulate $2,000,000 to be available when she retires 40 years from today. She investigates several investment options and she decides to invest in a stock market index fund after discovering that the long-term average return for the stock market is 10.4% per year. Since this will be a tax-sheltered account, she plans to ignore the impact of taxes.

a. If she plans to make 40 uniform annual deposits starting 1 year from today, what is the dollar amount of the required deposits?

b. If she makes the first of the 40 deposits starting today rather than 1 year from today, what is the dollar amount of the required deposits?

c. If she plans to make the first deposit 1 year from today and each annual payment will be $200 greater than the previous year’s payment,

(i) What is the dollar amount of the first deposit?

(ii) What is the dollar amount of the last deposit?

d. If she plans to make the first deposit 1 year from today and each annual payment will be 5% greater than the previous year’s payment,

(i) What is the dollar amount of the first deposit?

(ii) What is the dollar amount of the last deposit?

Reference no: EM131869267

Questions Cloud

R programming assignment : In this assignment you will use the lda algorithm from the MASS package, knn algorithm from the class package, to classify malignant vs. benign breast tumors

What is the NPV and IRR of the warehouse expansion : What is the NPV and IRR of the warehouse expansion? What do you recommend?

Determine the assumptions that govern estimates : Describe the conditions under which each criterion may be an adequate measure of the achievement of objectives.

Prepare a document in essay form about dangers of smoking : Prepare a Word document in essay form about dangers of smoking, just like you would be speaking to the group and be prepared to present.

What is the dollar amount of the required deposits : If she plans to make 40 uniform annual deposits starting 1 year from today, what is the dollar amount of the required deposits?

What would be expected stock price : Pych Out has 1,000,000 shares outstanding-currently has annual earnings per share of $5.20.what would be expected stock price if Pych repurchases 50,000 shares.

Explain the implications tactics : You are to assume that the impending changes are known or feared resulting uncertainty and disruption within the workplace that may potentially affect employee.

How does globalization affect democracy : Evaluate the effectiveness of two (2) possible solutions and suggest two (2) courses of action.

What should be the market price of moriband stock : If investors in stocks of companies like Moriband require a rate of return of 17.0 percent, what should be the market price of Moriband stock?

User Account

All Pages