Mr. Yiu just wins a lottery of $6,261,362 today. He opens a bank account and puts the whole amount in the bank account which gives him 3.4% p.a. interest rate. He will withdraw $100,000 from the account today. From next year onwards he will withdraw an amount that is 10% more than the previous year's amount. That means he will withdraw $100,000 x (1+10%) next year, and $100,000 x (1+10%)? two years later and $100,000 x (1+10%)³ three years later, and so on. (Hint: This is similar to the education fund question.) A. Based on Mr. Yiu's withdrawal plan above, calculate the number of years he can withdraw money from the account.

Deciding between traditional and Roth IRAs. Elijah James is in his early 30s and is thinking about opening an IRA. He can’t decide whether to open a traditional/deductible IRA or a Roth IRA, so he turns to you for help.   To support your explanation, you decide to run some comparative numbers on the two types of accounts; for starters, use a 25-year period to show Elijah what contributions of $5,500 per year will amount to (after 25 years) if he can earn, say, 10 percent on his money. Will the type of account he opens have any impact on this amount? Explain.   Assuming that Elijah is in the 22 percent tax bracket (and will remain there for the next 25 years), determine the annual and total (over 25 years) tax savings he’ll enjoy from the $5,500-a-year contributions to his IRA. Contrast the (annual and total) tax savings he’d generate from a traditional IRA with those from a Roth IRA. Now, fast-forward 25 years. Given the size of Elijah’s account in 25 years (as computed in part a),…

PLEASE SHOW ALL WORK  Richard deposits $ 5400 and got back an amount of $ 6000 after a year. Find the simple interest he got.

Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. In a perpetuity, returns—in the form of a series of identical cash flows—are earned.   A perpetuity continues for a fixed time period.   A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future.   The principal amount of a perpetuity is repaid as a lump-sum amount.     Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit…