Reference no: EM131215271

How much would you have to invest today to receive the following? Use Appendix B or Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. $12,500 in 7 years at 11 percent.

b. $16,100 in 15 years at 10 percent.

c. $6,250 each year for 14 years at 8 percent.

d. $43,000 each year for 30 years at 6 percent.

Phil Goode will receive $120,000 in 30 years. His friends are very jealous of him.

If the funds are discounted back at a rate of 11 percent, what is the present value of his future "pot of gold"? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

Sherwin Williams will receive $18,500 a year for the next 16 years as a result of a picture he has painted. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. What is the present value of these payments if the discount rate is 12 percent?

b. Should he be willing to sell out his future rights now for $162,000?

Yes
No

Franklin Templeton has just invested $9,760 for his son (age one). This money will be used for his son's education 19 years from now. He calculates that he will need $35,235 by the time the boy goes to school.

What rate of return will Mr. Templeton need in order to achieve this goal? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

Les Moore retired as president of Goodman Snack Foods Company but is currently on a consulting contract for $57,000 per year for the next 10 years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. If Mr. Moore's opportunity cost (potential return) is 9 percent, what is the present value of his consulting contract?

b. Assuming Mr. Moore will not retire for two more years and will not start to receive his 10 payments until the end of the third year, what would be the value of his deferred annuity?

Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of $360,000, and her life expectancy is 18 more years. Her pension fund manager assumes he can earn a 10 percent return on her assets.

What will be her yearly annuity for the next 18 years? Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

Juan Garza invested $107,000 5 years ago at 8 percent, compounded quarterly. How much has he accumulated? Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods.

You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement. During the period before retirement you can earn 8 percent annually, while after retirement you can earn 10 percent on your money.

What annual contributions to the retirement fund will allow you to receive the $17,000 annuity? Use Appendix C and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

Del Monty will receive the following payments at the end of the next three years: $17,000, $20,000, and $22,000. Then from the end of the 4th year through the end of the 10th year, he will receive an annuity of $23,000 per year.

At a discount rate of 10 percent, what is the present value of all three future benefits? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

Attachment:- Appendix.pdf