Personal financial management
Course:- Financial Management
Reference No.:- EM13238

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

You have recently won the UniSA "log tossing" competition. The prize of $200 is supposed to be used to buy a 50-year subscription to "Log News" This appears to represent a considerable saving on the normal subscription of $4.25 per half year, payable at the beginning of each half year with the first subscription due now. However, as a financial management student you figure that you may be better off by investing the prize money in your savings account which pays interest at an annual effective rate of 8% p.a. and paying the half yearly subscriptions from that account.

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

(Note: If you received from your account an equal amount every half year starting at the beginning of the first half-year, from which you paid the normal subscription, how much would you have left over each half year?)

(b) Assuming you adopt the latter course of action, could you afford to pay to attend the World Log Tossing Convention when you retire in 40 years from now when the registration is expected to cost $1,850 at that time? 

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
You have $33,556.25 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $220,000. You expect to earn
A share of common stock has just paid a dividend of $2.00 that is D0= $2.00. If the expected long-run constant growth rate for this stock is 5 percent, and if investors requir
Your firm is contemplating the purchase of a new $580,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It w
Suppose a stock had an initial price of $72 per share, paid a dividend of $1.15 per share during the year, and had an ending share price of $81. Compute the percentage total r
Backwater Corp. has 6 percent coupon bonds making annual payments with a YTM of 5.3 percent. The current yield on these bonds is 5.65 percent. How many years do these bonds ha
Douglass Trucking issued 120,000 shares of stock last week. The underwriters charged an 8.5 percent spread in exchange for agreeing to a firm commitment. The legal and account
Suppose that IBM bonds have a face value of $1,000 and are currently trading in the marketplace today for $1250.14. These bonds are trading at a ______ relative to the _______
You are considering investing in a project with the following outcome: Probabilities: Boom: 0.1 Normal: 0.5 Decline: 0.3 Depression: 0.1 Returns: Boom: 12% Normal: 9% Decline: