What is the future value of the lump sum 5 years

Assignment Help Business Management
Reference no: EM132233573

Kristi Jones has just contracted to sell land she inherited a few years ago. buyer is willing to pay $24,000 now(year 0) or the series of payments shown below. Kristi plans to invest any received payments in an account that earns 7% annual interest. She wants to buy a house in 5 yrs..WHat is the option that has the highest future value at the time? Year 1-Payment $2,000, Year 2 - Payment $4,000, Year 3- payment 6,000, Year 4- Payment - $8,000, Year 5-10,000.

a. What is the future value of the lump sum 5 years from now ?

b.What is the future value of the mixed stream five years from now?

c. Based on your findings in parts a &b , which should Kristi take?

d. If Kristi could earn 10% rather than 7% on the funds, would your recommendation in part c. change? Explain

Reference no: EM132233573

Questions Cloud

What ideas do you have for new nonprofit : What ideas do you have for a new nonprofit? How would you go about finding out if your idea is worth pursuing?
Amortizing monthly payments : You are considering to buy a $250,000 property with a 80% LTV ratio and have two mortgage choices: a FRM or a FRM with an IO period.
Write annotated summary of each article : Write annotated summary of each article. Use APA throughout. As an IT professional, discuss how you will use Balanced Scorecard to manage IT resources.
Determine the weighted-average number of shares : Determine the weighted-average number of shares that Culver Corporation would use in calculating earnings per share for the fiscal year ended
What is the future value of the lump sum 5 years : a. What is the future value of the lump sum 5 years from now ? b. What is the future value of the mixed stream five years from now?
How do you overcome employee apathy toward policy compliance : ISOL631 What are the differences between flat and hierarchical organizations? How do you overcome employee apathy toward policy compliance?
What is the bond market price : The par value is $1,000, and the coupon rate equals 7%. If the market's required return on the bond is 8% then what is the bond's market price?
Stock purchase on a company debt ratio : Does this suggest another use for excess cash? (And: What are the alternative uses for excess cash? And what does each use imply about the firm?
Why is it that increasing sample size reduces probability : Why is it that increasing the sample size reduces the probability of a Type II error to an acceptable level? (350 words)

Reviews

Write a Review

Business Management Questions & Answers

  Explain the most surprising lesson you learned

Explain the most surprising lesson you learned in this course and Discuss how this lesson changed the way you thought about at least one

  Conduct a swot analysis of developed country

Conducted a SWOT analysis on your chosen developed and developing countries. You were provided substantive feedback from your instructor

  Identify a disruptive innovation in healthcare

Identify a disruptive innovation in healthcare (i.e. one that completely changed the market). Why was t revolutionary? How did it change healthcare? How can you be prepared for change?

  U.s. department of homeland security

What is meant by a bottom-up approach? Shouldn't those with more knowledge and authority be in command?

  Essential condition for sustained economic progress

A democratic political system is an essential condition for sustained economic progress. Discuss.

  Create a better culture of an organisation

Who are the people you would consult with or seek advice from to create a better culture of an organisation?

  How many visible brands are you currently wearing

How many visible brands are you currently wearing? Research one of them (or if you're not currently wearing one, choose a brand you frequently wear or use).

  Describe the difference between formal and informal research

Write a paper that describes the differences between formal and informal research. What are the benefits and the drawbacks? Provide examples of when might you use each type of research.

  Collision domains or just one large collision domain

Which is better to have more and smaller collision domains or just one large collision domain?

  Integration of different types of methods

Peer-reviewed article that discusses research in an organization. Topic ideas include the role of research, development of research studies, integration of different types of methods, or the communication of research results within an organization..

  Key recent global economic events

Outline what you think are some of the key recent global economic events which have impacted, or are impacting, on the domestic economy. These could be events which occurred up to 5 years ago but are still influencing the domestic economy.

  Explain why the monopolist has no supply curve

Explain why the monopolist has no supply curve. Please help in an essay of at least three well developed paragraphs.

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