na wants to borrow $45 000 to purchase some shar erest charged for the following options: Balance Bank offer 11.5% over 5 years Cash Credit Union offer 12.5% over 3 years. ich ontion would TOU HO J C 2
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- Your financial advisor from Bluerock recommends you to invest in one of the plan. You want to compare and verify which of the following is the best investment option. Investment Plan A: Deposit $125,000 at the beginning and obtain $175,318.97 after 5 years.Investment Plan B: Deposit $243,000 at the beginning and obtain $319,771.42 after 7 years.Investment Plan C: Deposit $314,000 at the beginning and obtain $530,496.39 after 9 years. 1. Compute interest rate for all 3 plans. Which investment plan provides you the highest rate? 2. Your advisor updated the investment plan information yesterday. While the interest rate did not change for all 3 plans, future values of each investment are 210382.76, 415702.85, 742694.95, respectively. What would be the investment period for each plan? 3. Your advisor thinks it would be a good investment if you make an investment portfolio using all 3 investment plans suggested. He recommends investing in all 3 plans at year 0 and reinvest the money to…Graded 1: Provide Sue with financial advice on which option has the potential to yield the highest monetary value. Support your rational with calculations using time value of money and comment on the risk return relationship for each option, assume interest rate on savings is 4% and is compounded semi-annually. Sue James is a 55-year old accountant who works at Ernst and Young (EY) who is about to retire. She has the following decision to make: Option A – Select a lump sum gratuity payment of $120,000 with a reduced pension of $1,750 per month. Option B – Select a monthly pension of $3,300 with no lump sum gratuity payment. In addition, Sue has a loan of $72,000 with loan payments of $1,200 per month for the next five years.Provide Sue with financial advice on which option has the potential to yield the highest monetary value. Support your rational with calculations using time value of money and comment on the risk return relationship for each option, assume interest rate on savings is 4% and is compounded semi-annually. Sue James is a 55-year old accountant who works at Ernst and Young (EY) who is about to retire. She has the following decision to make: Option A – Select a lump sum gratuity payment of $120,000 with a reduced pension of $1,750 per month. Option B – Select a monthly pension of $3,300 with no lump sum gratuity payment. In addition, Sue has a loan of $72,000 with loan payments of $1,200 per month for the next five years.
- Suppose that you won $3,000,000/- in a lottery. You are given the option to take $100,000/- at the end of each year for 30 years or take $1,500,000/- now. If your bank is giving 6% interest on investments. Calculate and decide which option you should takeAn investor has $100,000 to invest in a business venture, or she can earn 10%/year with a $100,000 certificate of deposit for 4 years. Three possible business ventures have been identified. Any money not invested in the business venture can be put into a bank account that earns 7%/year. Basedon a future worth analysis, what should be done with the $100,000?You are 22 years old and you want to have $1 million in your retirement account at age 50. How much money do you need to invest each year (to the nearest $100), if you can get an 8% annual rate of return on mutual funds that invest in S&P 500 stocks? OA $35,700 OB.$10,500 OC. $15,600 O D. $20,600 Reset Selection
- Use the following information for the next two questions: Please answer the two questions. Thank you <3 You finished your studies, passed the CPA board exams, and now an accountant. A real estate company offered to sell you a house with a cash selling price of P14,000,000 under an in-house financing agreement. The amortization will be on a monthly basis over a period of 25 years and the effective interest rate is 12%. You are wondering if you can afford to purchase the house. You estimated your monthly expenditure to be P36,600, which included a risk adjustment allowance. 7. What should be the minimum balance of your monthly take home salary so that you will be able to afford to purchase the house? a 147,451.38 b. 148,051.38 c. 151,048.38 d. 184,051.38 8. How much is the total interest expense on the financing agreement ? a. 30,235,414 b. 23,335,216 c. 20,235,414 d. 13,265,9921.You have a client that plans to put $100,000 into a brokered 5‐year CD with you. You see two 5‐year CD options on your screen that she could invest in. Which of the options provides more total return, and by how much? East Coast Bank: 6% simple West Coast Bank: 6% monthly A. West Coast; $1,062 B. East Coast; $1,062 C. East Coast; $4,885 D. West Coast; $4,885You have just won the state lottery and have two choices for collecting your winnings. You can collect $105,000 today or receive $20,700 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9% on your investments. Required: 1. Calculate the present value of both the options (EV. of $1. PV or $1. EVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Present Value 105,000 Option 1 Option 2 2. Which alternative should you select? O Option 1 O Option 2
- Martha wishes to invest the sum of R30000. The bank she approached with her business idea gave her 3 investment options to choose from. Option A: To invest the money in a business that pays an interest of 5% compounded quarterly. Option B: To invest in a business that pays an interest of 4% compounded monthly Option C: To invest in a business that pays an interest of 4.5% compounded continuously. Which option should Martha choose?Travis Wenzel has $2,000 to invest. Usually,he would deposit the money in his savings account,which earns 6% interest compounded monthly. However, he is considering three alternative investmentopportunities.• Option 1. Purchasing a bond for $2,000. Thebond has a face value of $2,000 and pays $100every six months for three years, after which timethe bond matures.• Option 2. Buying and holding a stock that grows11% per year for three years.• Option 3. Making a personal loan of $2,000 to afriend and receiving $150 per year for three years.Determine the equivalent annual cash flows for eachoption, and select the best option1. Claire wants to invest $10,000 she got as a graduation gift from her family. She has the following options. (i) SAFE: Put it in a savings account that has an APR of 1.5% interest compounded monthly. (ii) MORE RISKY: Put it in a stock index fund that had an average APR of 11% over the last year. Find the value of each investment in 5 years and advise Claire about how to invest the money. There are different ways to advise Claire so be sure to give reasons for your advice. 2. How much must you deposit today into an account with quarterly compounding interest and an APR of 6% in order to have $30,000 in 10 years for a down payment on a house? Assume no additional deposits are made. How much of the money saved is interest?
