Ed Long promised to pay his son $320 semiannually for 12 years. Assume Ed can invest his money at 6% in an ordinary annuity. How much must Ed invest today to pay his son $320 semiannually for 12 years?

Q: Carla Lopez deposits $3,000 a year into her retirement account. If these funds have an average…

A: Annual deposit = $3,000Interest rate = 5%Number of years = 50Value of the retirement account is the…

Q: ally into a life insurance fund for the next 5 years, at which time he plans to retire. Instead of a…

A: The given problem can be solved using FV and PMT function in excel. FV function computes amount…

Q: bob wants to retire in 10 years and then have enough money saved to withdraw $75,000 a year for 15…

A: The term "annuity" is a financial term that represents a series of cash flows for a specific period.…

Q: Your grandmother bought an annuity from Manulife Financial for $306,248 when she retired. In…

A: Step 1:Step 2:

Q: our grandmother left you an inheritance that pays $440 at the end of each year for a total of 12…

A: Annual Payment = p = $440Number of payment = n = 12Time until First Payment = t = 5Interest Rate = r…

Q: On the birth of a child, the father wants to deposit a sum in a savings account. He intends to…

A: Sum Deposit = ? 20,000 every month for 4 years starting on 18th birthday Interest Rate = 10%…

Q: Willie deposits a fixed monthly amount into an annuity account for his child’s college fund. He…

A: Here, to calculate the monthly contribution we have to use the formula of future value of annuity.…

Q: Your uncle is about to retire, and he wants to buy an annuity that will provide him with $95,000 of…

A: Annual Payment (P) = $95,000Interest rate (r) = 4.70% or 0.047Number of years (n) = 20Payment timing…

Q: In December 2020 Sally purchased an annuity that pays her $1,000 per month for 16 years. She paid…

A: Given in the question: Annuity purchased for = $150,000 During the year 2021, Sally has received the…

Q: will receive a perpetuity of $34,000 per year forever, while curly will receive the same annual…

A: Present value is the equivalent value of money today of the future money based on the time value of…

Q: Your uncle gives you $92,000 as a gift. Rather than give you a lump-sum, your uncle structures the…

A: Giftable amount (PV) is $92000 Annunity per year (PMT) is $16,250 Interest rate is 12% To Find:…

Q: Geoff has paid $19,000 for a retirement annuity from which he will receive $1,624 at the end of…

A: Future value The value of an investment in a particular future date is known as its future value.…

Q: Abigail wishes to establish a trust fund from which her daughter can withdraw $6,000 every six…

A: Present value is the current date value of the future expected cash flows of the annuity fund.…

Q: Carla Lopez deposits $2,500 a year into her retirement account. If these funds have an average…

A: Future value of Annuity cash flows = A x [(1+i)^t -1] / iwhereA = Periodic cash flow = $2,500 per…

Q: u would like to give your daughter $75,000 towards her college education 17 years from now. How much…

A: The amount to be set aside today is calculated as the present value using following equationPresent…

Q: Mike joins a savings program where he deposits $1000 at the begint he will earn a perpetuity paying…

A: Here,

Q: Tom has decided to invest $400 quarterly for 4 years in an ordinary annuity a 8%. As his financial…

A: Quaterly investment amount is $400 Time period is 4 years Interest rate is 8% To Find: Cash value…

Q: Ava enjoys investing in annuity that will pay her $5,000 at the end of each month for 5 years after…

A: Monthly payment = $ 5000 Period = 5 Years Number of monthly payment = 5*12 = 60 Annual interest rate…

Q: Jerry wishes to retire at age 65. He wishes to receive an annuity that pays $50,000 per year…

A: Annuity refers to the amount to be withdrawn in the future for a specific time period. Present worth…

Q: Nancy Billows promised to pay her son $600 quarterly for 4 years. If Nancy can invest her money at 8…

A: The provided information are: Annuity (A) = $600 Number of periods = 4(4) = 16 The rate of interest…

Q: Sheila is planning to retire in 9 years. For 9 years, at the end of each year Sheila plans to invest…

A: Annual investment (C) = $6,000 Interest rate (r) = 0.07 Number of investments (n) = 9 Final value =…

Q: Destiny invests $20,000 today into a retirement account. She expects to earn 7 percent, compounded…

A: The FV of an investment refers to the value of the cash flows of the investment at a future date…

Q: To secure the future of his son, a man plan to deposit P50,000 in a bank account every quarter for 5…

A: Effective interest rate There is different frequency of deposited amount and the compounding of…

Q: Cyrus deposits a fixed monthly amount into an annuity account for his child's college fund. He…

A: Interest earned refers to an amount that is being earned by the investors over the amount of…

Q: Your grandparents would like to establish a trust fund that will pay you and your heirs $210,000 per…

A: Present value:Present value is a financial concept that refers to the current worth of a future cash…

Q: If you desire to have $80,000 for a down payment for a house in 7 years, what amount would you need…

A: Note:  We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Your grandfather is retiring at the end of next year. He would like to ensure that his heirs receive…

A: Present value= Annual cash flows / Discounting rate= 96666.666666666666667= 96666.67 Approx

Q: On his 40th birthday, Mr. Ramos decided to buy a pension plan for himself. This plan will allow him…

A: Quaterly payout(pension) is 10,000 Interest rate is 8% comppounded quaterly Time period of Pension…

Q: Jay has just retired and will receive a pension of 3,857 per month for 20 years. After which he…

A: The Present Value   is the current value of a future amount i.e.,   it is the amount to be invested/…

Q: Jake Werkheiser decides to invest $8000 in an IRA at the end of each year for the next 6 years. If…

A: The future value refers to the value of an investment or an amount of money at a specified point in…

Q: A man wishes his son to receive $250,000 ten years from now. What amount should he invest if it will…

A: Given: FV = $250,000   To calculate: Present Value   Let's understand the interest rates:…

Q: Trish invests $6,000 in her IRA in a bond trust that pays 11% interest compounded semiannually. Sean…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Brenda Young desires to have $16,500 eight years from now for her daughter’s college fund. If she…

A: Data given: FV= $16500 n=8 years r=12% (compounded annually) Required: what amount should she…

Q: Blushing Rose invests $1,000 into her Roth IRA. She can increase thisinvestment annually by $1,000…

A: The computation is as follows:

Q: Ginger Rogers deposits $3,000 a year into her retirement account. If these funds have an average…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: r. Bearer may choose to take a lump-sum payment of $25,292.8 now from his insurance policy or an…

A: Annuity is the series of equal payments that are made at regular intervals and payments are uniform…

Q: 4. On retirement, Gilbert finds that his share of a pension fund is P1 500 000. If the fund is…

A: Standard Disclaimers“Since you have asked multiple question, we will solve the first question for…

Q: Janet Lopez wishes to establish a trust fund from which her son can withdraw $15,000 every six…

A: The objective of the question is to find out the initial amount that Janet needs to deposit in the…

Q: Siegfried Basset is 65 years of age and has a life expectancy of 11 more years. He wishes to invest…

A: An annuity refers to a series of cash flow that occurs on a periodic basis. Here the amount that…

Q: Abdulrahman is 60 years of age and has a life expectancy of 15 more years. He wishes to invest…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: You annually invest $1,500 in an IRA starting at the age of 20 and make the contributions for 10…

A: If you have any problem let me know in comment box thankyou.

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.