Willing to pay today as one large payment to buy annuity

Assignment Help Financial Management
Reference no: EM131972446

1. Finance is Great Co. wants to sell you an annuity. It will pay you $710 per quarter for 20 years. You want to earn at least a5.6 percent return each year. What is the most you are willing to pay today as one large payment to buy this annuity?

2. Hillary is going to contribute $250 on the first of each month, starting today, to her retirement account. Her employer will contribute by adding $125 to the amount Hillary saves. If the two of them continue to do this and she can earn a monthly interest rate of .5 percent in her retirement account, how much will she have 25 years from today?

Reference no: EM131972446

Questions Cloud

Calculate the gain or loss on the futures position : Calculate the gain or loss on the futures position (per contract). Calculate the basis risk (per contract).
What is the sharpe ratio of the tangency portfolio : Determine the equation for the optimal CAL. What is the Sharpe Ratio of the tangency portfolio?
The dividend will grow at constant rate : How do you calculate the implied growth rate for a stock that is currently priced in equilibrium and the dividend will grow at a constant rate?
Three-year expansion project to make new widgets : Wacky Widgets, Incorporated is considering a new three-year expansion project to make new Widgets.
Willing to pay today as one large payment to buy annuity : What is the most you are willing to pay today as one large payment to buy this annuity?
NPV technique and IRR method to evaluate project : Use both the NPV technique and IRR method to evaluate this project.
What is percentage price change of bond : If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond J?
Which this project is acceptable investment : What is the MINIMUM interest rate for which this project is an acceptable investment?
What was annual percentage increase : What was the annual percentage increase in the winner’s check over this period?

Reviews

Write a Review

Financial Management Questions & Answers

  Firm uses its excess cash to complete a stock repurchase

What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?

  Capital structure analysis-what is the total corporate value

Pettit Printing Company has a total market value of $100 million, consisting of 1 million shares selling for $50 per share and $50 million of 10% perpetual bonds now selling at par. The company's EBIT is $11.06 million, and its tax rate is 25%. What ..

  Estimate exchange spot rate which will prevail in one year

given the market data which you have available to estimate the exchange spot rate which will prevail in one year?

  What is the expected value of this opportunity

A black box has a total of 10 balls sitting inside. One ball is labeled $100. Two balls are labeled $200, and seven balls are labeled $300. Suppose that you are offered the opportunity of picking one ball at random, meaning you choose one ball but yo..

  Save some money for your two dream vacations

You want to save some money for your two dream vacations as well as have some money available during your retirement years.

  Does this create disbursement float or collection float

Does this create a disbursement float or collection float? What is your available balance? What is your book balance?

  Calculate economic value added assuming its cost of capital

Calculate the economic value added assuming its cost of capital is 10%.

  Values of mean return and variance for the stock fund

Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.20 −38% −12% Mild recession 0.20 −26% 7% Normal growth 0.35 8% 3% Boom 0.25 46% 7% a. Calculate the values of mean return and var..

  Determined an appropriate risk-free rate

Determined the companys Beta coefficient from publicly available information and stock data on the company - Determined the appropriate risk-free rate of return

  What was the company retained earnings at the end of year

A firm began the year with retained earnings of $1,000. Net income for the year was $250, it repaid $350 of its line of credit balance, and it paid dividends to its shareholders of $200. What was the company’s retained earnings at the end of the year..

  How much must john invest

How much must John invest at the end of each of the next 25 years to be able to make the cash payment at retirement?

  Decide which project the company should accept

By computing and comparing the EAB of the two projects, decide which project the company should accept.

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