Bilbo baggins wants to save money to meet three objectives

Assignment Help Finance Basics
Reference no: EM13616890

Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $31,500 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $415,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $1,375,000 to his nephew Frodo. He can afford to save $4,000 per month for the next 10 years. If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

Reference no: EM13616890

Questions Cloud

A furniture company produces 5 times as many beds on shift : a furniture company produces 5 times as many beds on shift two than on shift one. if a total of 240 beds were produced
Can it at the 001 level of significance be concluded that : a sample of 15 graduates from eastern university showed that the mean time until they received their first job
Two identical charges are fixed to diagonally opposite : two identical charges are fixed to diagonally opposite corners of a square 0.5m on the side. each charge is 3x10-9c how
Harry jones has invested onethird of his funds in share 1 : q1. since 1 august 2005 adam smiths investment policy has been to lodge fixed term deposits at his local bank. the bank
Bilbo baggins wants to save money to meet three objectives : bilbo baggins wants to save money to meet three objectives. first he would like to be able to retire 30 years from now
Supermarket customers load their carts with goods totaling : supermarket customers load their carts with goods totaling between 5 and 200 uniformly continuously distributed call
The magnetic field is in the negative x direction and has a : a proton travels through uniform magnetic and electric fields. the magnetic field is in the negative x direction and
Forecasting services numerous exchange rate forecasting : forecasting services. numerous exchange rate forecasting services exist. tridents cfo maria gonzalez is considering
What is the magnitude of the vertical component of earths : an astronaut is connected to her spacecraft by a 29-m-long tether cord as she and the spacecraft orbit earth in a

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the expected return of each stock calculate the

1. assume you have predicted the following returns for stock a and b in four possible states of the economy.what is the

  The firm pays the remaining cash in dividends to a

a firm in australia earns a pretax profit of a30 per share. it pays a corporate tax of a9 per share 30 tax rate in

  Assume a project has earnings before depreciation and taxes

assume a project has earnings before depreciation and taxes of 15000 depreciation of 25000 and that the firm has a 30

  Sales managers proposal

The president, vice president, and sales manager of Moorer Corporation were discussing the company's present credit policy.

  What is the portfolio weight of stock a

You have a portfolio consisting solely of stock A and stock B. The portfolio has an expected return of 9.8 percent. Stock A has an expected return of 11.4 percent while stock B is expected to return 6.4 percent. What is the portfolio weight of sto..

  Changes and errors and change in methods

What are the advantages and disadvantages of issuing both types of shares? Which type of shares would you decide to issue and why? What affect would the new issuance have on the financial statements?

  What is an angel capitalist

What is an angel capitalist? How do the financing techniques used by angels differ from those employed by professional venture capitalists?

  Historically high return stocks have exhibited lower risk

historically high return stocks have exhibited lower risk than low return stocks?.just the opposite what the sml

  Compute the following ratios for year 1 year 2 and year 3

compute the following ratios for year 1 year 2 and year 3 for company a1. debt ratio2. debt-to-equity ratio1 preparing

  What is the effective rate of interest

Randall Corporation plans to borrow $250,000 for one year at 21 percent from the Waco State Bank. There is a 29 percent compensating balance requirement. Randall Corporation keeps minimum transaction balances of $16,000 in the normal course of bus..

  Question 1calculate the present value of 1000 zero-coupon

question 1calculate the present value of 1000 zero-coupon bond with 5 years to maturity if the required annual interest

  What are the after-tax cash flows for the company

Assume a corporation has earnings before depreciation and taxes of $82,000, depreciation of $45,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company.

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