What is the two-year effective interest rate

Assignment Help Financial Management
Reference no: EM131962565

You plan to save for your retirement by depositing 15 payments of $12,000 into an account every other year. The first payment is made one year from today and the remaining 14 payments come every other year (i.e. 1st payment is at year 1, 2nd payment at year 3, 3rd payment at year 5,....,15th payment at year 29).You assume investments in this account will earn a nominal rate of return of 10%, compounded annually.

a. What is the 2-year effective interest rate?

b. What is the future value of your deposits at year 29?

c. If you plan to make 10 annual withdrawals from your retirement account starting one year after your last deposit, how much will your annual withdrawal be?( using the same rate of return of 10%)

Reference no: EM131962565

Questions Cloud

How company capital structure impacts its progress : How a company's capital structure impacts its progress through the bankruptcy process?
Determine the risk premium on common stock : Cost of common stock: CAPM J&M Corporation has a beta,b,of 1.2. Determine the risk premium on J&M common stock.
Interpreting beta. : A firm wishes to assess the impact of changes in market return on asset that has beta of 1.20. Would this asset be considered more or less risky than market?
The current fed funds rate-interest on excess reserves : The current fed funds rate is (lower/equal)_interest on excess reserves because _. Which of following statements are true about an open market purchase today.
What is the two-year effective interest rate : What is the 2-year effective interest rate? What is the future value of your deposits at year 29?
Find the apr or stated rate : Find the APR, or stated rate, in each of the following cases
What is the ethical dilemma : What is the ethical dilemma? Should IIBS delay the Protech’s IPO until more information can be gathered about “information” Staci received recently
What is the asset beta for tanw : You are trying to calculate the WACC for two firms. What is the asset beta for TanW?
Combining qualitative and quantitative research : What are the advantages of combining qualitative and quantitative research? Explain

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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