What will the annual payments have to be

Assignment Help Financial Management

Reference no: EM13883165

You need to save $50,000 in 10 years from today. You want to make annual payments at the end of each year into a sinking fund that will earn interest at an annual rate of 10 percent.

a) What will the annual payments have to be?

Suppose that the borrower will make monthly payments that earn 10 percent interest, compounded monthly.

b) What will the monthly payments have to be?

Reference no: EM13883165

Questions Cloud

Balance of the savings account as down payment : An investor wants to save for five years for a down payment on a house. She deposits $200 per month into a savings account paying 7% compounded monthly. At the end of the five years, she places the balance of the savings account as a down payment on ..

Setting the price on a new outpatient service : Assume that managers of QVC Hospital are setting the price on a new outpatient service. Here are relevant data estimates: Variable cost per visit $25.00. Annual Direct Fixed Costs $750,000

What mutual fund would you recommend : What mutual fund would you recommend for a 65 year old retired school teacher who is extremely conservative in her investing? She doesn’t want to lose one dollar. She has retirement money to live on but she is concerned about inflation and taxes.

What would the bond equivalent yield : You have a U.S. Treasury bill with 112 days to maturity quoted at a discount yield of 3.82 percent. Assume a $1 million face value. What would the bond equivalent yield?

What will the annual payments have to be : You need to save $50,000 in 10 years from today. You want to make annual payments at the end of each year into a sinking fund that will earn interest at an annual rate of 10 percent. What will the annual payments have to be? Suppose that the borrower..

About the life insurance policy : Theo is a consultant who earns 72,000$ annually. His wife, Julia is a homemaker and theey have one child, Ben. Theo is covered by 200,000$ life insurance policy. The couple assumes an annual inflation rate of 3%. How would you design a finance plan f..

Expansion project-requires an initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.94 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

Calculate work life expectancy : Juan, married and a father of 4 is 45 and expects to work until 65. he earns 70,000$ a year and expects an increase annually of 5%. Juan expects inflation to be 4% over his working life. His personal consumption is earl to 10% after tax earning and h..

About the expected return on the portfolio : You own a portfolio that is 38 percent invested in Stock X, 22 percent in Stock Y, and 40 percent in Stock Z. The expected returns on these three stocks are 10 percent, 15 percent, and 12 percent, respectively. What is the expected return on the port..

User Account

All Pages