h After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visitingthe human resources office, you found that you have several retirement options to choose froma. An immediate cash payment of $112 millionb. Payment of $62,000 per year for lifec. Payment of $52,000 per year for the first 4 years and then $72,000 per year for the remainder of your life (this option is intendedto give you some protection against Inflation)You believe you can earn 10 percent on your investments, and your remaining life expectancy is 8 years.Required:1. Calculate the present value of each option. Euture Values of $1. Present Value of $1. Euture Value Annuity of $1. Present ValueAnnuity of $1)2. Determine which option you preferComplete this question by entering your answers in the tabs below.Required 1Required 2Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1.Present Value Annuity of $1.)Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Enter your answers in wholedollars, not in millions. Round the final answer to nearest whole dollar.Option AOption BOption C$s$Present ValueAnswer is complete but not entirely correct.62656500062 3Required 2 >Show less&

Present value of option A = Immediate cash payment = $112 million

Answered: Required; 1. Calculate the present…

Required; 1. Calculate the present value of each option. (Euture Value of $1. Present Value of $1. Euture Value Annuity of $1. Present Value Annuity of $3) 2. Determine which option you prefer

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you found that you have several retirement options to choose from: An immediate cash payment of $1.11 million. Payment of $53,000 per year for life. Payment of $43,000 per year for the first 3 years and then $63,000 per year for the remainder of your life (this option is intended to give you some protection against inflation). You believe you can earn 7 percent on your investments, and your remaining life expectancy is 6 years. Required: Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Determine which option you prefer.
After completing a long and successful career as senior vice president for a large bank, you arepreparing for retirement. After visiting the human resources office, you have found that you haveseveral retirement options: (1) you can receive an immediate cash payment of $1 million, (2) youcan receive $60,000 per year for life (your remaining life expectancy is 20 years), or (3) you canreceive $50,000 per year for 10 years and then $70,000 per year for life (this option is intended togive you some protection against inflation). You have determined that you can earn 8 percent onyour investments. Which option do you prefer and why?
You are meeting with a financial planner to begin saving for retirement. Your starting salary is $65,000 in year one and you expect to receive pay increases at a rate of 3% each year for the first 30 years of your career, then maintain your salary until you retire. Your financial planner advised you to invest 10% of your yearly salary into a retirement account to maintain a similar lifestyle in retirement. You expect to work for the next 40 years. How much will you have in the account when you retire if your retirement account produces an average return of 9% per year?
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Suppose that you start working for a company at age 25. You are offered two rather unlikely, but quite enticing, retirement plans from which you are allowed to choose one. [Round all answers to the nearest dollar.] Retirement plan 1: When you retire, you will receive $16,000 for each year of service. Retirement plan 2: When you start work, the company deposits $2500 into a savings account that is guaranteed to pay a yearly rate of 16%. When you retire, the account will be closed and the balance given to you. A. Determine the amount you would receive under plan 1, if you retired at age 55. $ B. Determine the amount you would receive under plan 1, if you retired at age 65. C. Determine the amount you would receive under plan 2, if you retired at age 55. D. Determine the amount you would receive under plan 2, if you retired at age 65.
1) In a few short years, you will graduate and enter the workforce. Let us suppose that you and a friend both start working at the age of 23 and decide on very different ways to fund your eventual retirement. In this exercise, we explore these decisions. Neither of you have any savings (P = 0), plan to retire at age 66, and expect to earn 8.4% annual interest, compounded monthly, on all your investments. a) Having taken this class, you decide to start immediately, investing $120 per month. How much money will be in your account in 20 years? b) At this point (you are now 43 years old), you will stop making monthly deposits into your account. Now, the amount you calculated in part (a) will accumulate interest for 23 years (until you are 66 years old). How much is in your account now? Indicoob selled pham
show all excel formulas/ work answering the following: Saving For Retirement You are offered the opportunity to put some money away for retirement. You will receive five annual payments of $25,000 each beginning in 40 years. How much would you be willing to invest today if you desire an interest rate of 12%?
A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance. Putting specifics aside, you start to ponder the retirement nest-egg this could help you accumulate over the next 30 years. As a diligent finance student you do some research and find that the money can be invested into an account paying a fixed 4% rate, compounded quarterly. How much retirement money would be in the account after 30 years? (round to nearest dollar) Answer in written and excel
A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance. Putting specifics aside, you start to ponder the retirement nest-egg this could help you accumulate over the next 30 years. As a diligent finance student, you do some research and find that the money can be invested into an account paying a fixed 4% rate, compounded quarterly. How much retirement money would be in the account after 30 years? (round to nearest dollar) I need to know what this is a PV or an FV. I think I solved it but not sure if it is correct. I need to see how the answer is done in Exel. I see you had one done but I just need the formula for the correct answer. Here is my answer.=FV(0.04/4,4*30,0,-1000000,0)
Part A: By the end of this year, you would be 35 years old and you want to plan for your retirement. You wish to retire at the age of 65 and you expect to live 20 years after retirement. Upon retirement, you wish to have an annual sum of $50,000 to supplement your social security benefits. Therefore, you opened now your retirement account with a 7% annual interest rate. At retirement, you liquidate your account and use the funds to buy an investment-grade bond which makes $50,000 annual coupon payments based on a 6 % coupon rate, throughout your retirement years. How much will the face value of the bond that you will be investing? Please calculate the monthly payment in your retirement account in order to be able to achieve the plan mentioned above? How much will your inheritors receive?
A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance. Putting specifics aside, you start to ponder the retirement nest-egg this could help you accumulate over the next 30 years. As a diligent finance student you do some research and find that the money can be invested into an account paying a fixed 4% rate, compounded quarterly. How much retirement money would be in the account after 30 years? (round to nearest dollar)=FV(0.04/4,30*4,0,-1000000,0) This the answer for Q 5 It turns out that the gentleman in Question 5 is really a devious centaur looking to con good people out of their hard earned money. Undeterred, you decide to calculate how much money you would need to put aside at the beginning of each month for the next 30 years in order to have the sum of money determined in Question 5. You estimate conservatively that your money will earn 3% a year, compounded monthly. What will your monthly contribution to the account need to be? Answer…
A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance. Putting specifics aside, you start to ponder the retirement nest-egg this could help you accumulate over the next 30 years. As a diligent finance student you do some research and find that the money can be invested into an account paying a fixed 4% rate, compounded quarterly. How much retirement money would be in the account after 30 years? (round to nearest dollar)=FV(0.04/4,30*4,0,-1000000,0) This the answer for Q 5 It turns out that the gentleman in Question 5 is really a devious centaur looking to con good people out of their hard earned money. Undeterred, you decide to calculate how much money you would need to put aside at the beginning of each month for the next 30 years in order to have the sum of money determined in Question 5. You estimate conservatively that your money will earn 3% a year, compounded monthly. What will your monthly contribution to the account need to be? Answer…

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