About to retire and he wants to buy an annuity

Assignment Help Financial Management
Reference no: EM13883757

Your uncles is about to retire and he wants to buy an annuity that will provide him with $62000 of income a year for 20 Years, with the first payment coming immediately. The going rate on such annuites is 5.25%. How much would it cost him to buy the annuity?

Reference no: EM13883757

Questions Cloud

Which database models are built on the inverted : Which database models are built on the inverted tree structure? What are the disadvantages of using the inverted tree structure for a database?
Write a program that asks the user for a file name : Write a program that asks the user for a file name. Assume the file contains a series of numbers, each written on a separate line. The program should read the contents of the file into an array and then display the following data:
Dollar spot exchange rate : The current Swiss franc to U.S. dollar spot exchange rate is SFr1.60/$. The expected inflation over the coming year is 2 percent in Switzerland and 5 percent in the United states. According to purchasing power parity, what is the expected value of th..
Is the interest rate parity holding : A foreign exchange arbitrageur notices that the Japanese yen to U.S. dollar spot exchange rate is ¥108/$ and the three-month forward exchange rate is ¥107.30/$. The three-month $ interest rate is 5.20 percent per Annum and the three-month ¥ interest ..
About to retire and he wants to buy an annuity : Your uncles is about to retire and he wants to buy an annuity that will provide him with $62000 of income a year for 20 Years, with the first payment coming immediately. The going rate on such annuites is 5.25%. How much would it cost him to buy the ..
Written communication is an essential tool : Written communication is an essential tool for any professional. As with any skill, writing well is the result of practice followed by feedback and the use of relevant and appropriate sources. Therefore, the quality of writing is graded as part of th..
Conveyor belt systems-pretax annual operating costs : Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $204,000, has a four-year life, and requires $66,000 in pretax annual operating costs. Calculate the NPV for both conveyor belt sys..
Within a hierarchical database : Within a hierarchical database, what is the name for the built-in linkages in data tables? Which data relationships can be contained in a hierarchical database?
Research paper - attachment theories : Attachment or lack of attachment is one of the several psychological issues that can affect our behaviors from childhood to death. Attachment behavior issues link into parenting styles and trust versus mistrust issues

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare an income statement for krugpark in good form

KrugPark produces a popular beverage called odes us which sells for $97 a case. Last year KrugPark sold 170,000 cases, each of which costs $50 to produce. KrugPark incurred selling and administrative expenses of $670,000 and depreciation expense of $..

  Expected return on the market

Security I has a beta of 1.3, the risk-free rate is 4%, and the expected return on the market is 11%. What is the expected return for Security I?

  What is the total expected return of this investment

An investor with a 3-year investment horizon wants to buy a 20-year 8% coupon bond for $82.84, with YTM as 10%. He expects to be able to reinvest the coupon interests at 6%, and 3 years later he can sell the bond to offer a YTM of 7%. What is the tot..

  How does the time value of money work

You have $100,000 you want to invest for the next 30 years. You are offered an investment plan that will pay you 10% per year for first the 20 years and 7% for the last 10 years. How much money will you have at the end of the 30 years? Does it matter..

  Principles of risk management and insurance

Sam, age 35, and Kathy, age 33, are married and have a son, age 1. Sam is employed as an accountant and earns $75,000 annually. Kathy is a professor of finance at a large state university and earns $150,000 annually. Sam is killed instantly in an aut..

  Determine actual implementation of their distribution policy

Which of the following help firms determine the actual implementation of their distribution policy? Which of the following uses is considered a good use of free cash flow? A company invests 15% of its FCF in marketable securities. This makes it diffi..

  Preparing to implement the operating expansion plan

The Genesis Energy operations management team is now preparing to implement the operating expansion plan. Previously, the firm’s cash position did not pose a challenge. Evaluate historical data and prepare assumptions that will drive the planning pro..

  This case is intended to be an introduction to the various

this case is intended to be an introduction to the various methods used in capital budgeting and looks at some of the

  Treasury securities and the yield on debt with same rating

In December 1995 Boise Cascade’s stock had a beta of 0.95. The Treasury bill rate at the time was 5.8% and the Treasury bond rate was 6.4%. Assume the term structure of interest gives a 200 bp (basis point – a basis point is 1/100 of a %) spread betw..

  What is the current bond price

Lycan, Inc., has 6 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 8 percent, what is the current bond price?

  Division qualifies as a component of the entity according

The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its strategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity accordin..

  Using the profitability index when evaluating projects

Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining’s cost of capital is 8.75 percent. What is the PI of a project if the initial costs are $2,371,020 and the project life is estimated as 9 years? The project..

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