Reference no: EM132994021
Questions -
Q1. Sam Hill has just won the state lottery, paying $500,000 a year for the next 30 years. Sam will receive his first payment today. If the interest rate is 4%, what is the present value of his lottery winnings? (Enter a positive value and round to 2 decimals)
Q2. Joe Smith has $100,000 in student loans. His bank charges 6% APR (compounded monthly). Suppose Joe can only afford to pay $1,500 per month towards his student loans, calculate the number of months it will take to pay off his student loans. (Round up to the nearest whole number)
Q3. The United Kingdom has a consol bond that pays a $150 coupon every 6-months (semi-annually), forever. If the next payment is due in exactly 6 months from today and the discount rate is 3% APR (compounded semi-annually), then calculate the present value of this investment. (Enter a positive value and round to 2 decimals)
Q4. Microsoft Corp. will pay a dividend of $2.24 per share next year. Investors anticipate that the annual dividends will grow by 5% per year forever, and they require an 8% discount rate. Calculate the value of the stock. (Round to 2 decimals)
Q5. Suppose you put $500 per month into a Roth IRA, that pays 12% APR (compounded monthly). Assume you have nothing saved today, calculate the future value of the retirement account 35 years from today. (Enter a positive value and round to 2 decimals)
Q6. April Stigum will receive a 20-year annuity of $10,000 per year, beginning 7 years from today. In other words, the first payment will be made at the end of year 7. Assuming a required rate of return of 7%, calculate the present value today of her annuity. (Enter a positive value and round to 2 decimals)
Q7. Joe and Sarah Fabozzi are saving for the college education of their 2-year-old daughter, Beth. The Fabozzi's estimate that college expenses will run $80,000 per year when their daughter reaches college in 16 years. In other words, the first withdrawal will be made on Beth's 18th Birthday and the last deposit (payment) will be made on Beth's 17th Birthday. The expected interest rate while saving and in college is 8%. Assume today is Beth's second birthday and the first deposit will be made one year from today. Calculate the annual payment the Fabozzi's must make to the account so that their daughter will be completely supported through four years of college. (Enter a positive value and round to 2 decimals)
Q8. George Anders has just been offered a job at $65,000 per year, with the first payment made one year from today. He anticipates his salary will grow by 3% per year until his retirement in 40 years. Given an interest rate of 6%, calculate the present value of his lifetime salary. (Enter a positive value and round to 2 decimals)
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What is the name of the test you have undertaken
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Determine the optimal number of shoes per order
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Unit 06 Introduction to Finance Assignment
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What is the most profitable investment strategy
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What is the present value of his lottery winnings
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What is the amount of loss or gain on realization
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Calculate the after-tax interest paid on the bonds
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Calculate wildhorse basic earnings per share
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What was georgia corp taxable income
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