Required Lump-Sum PaymentTo complete your last year in business school and then gothrough law school, you will need $30,000 per year for 4years, starting next year (that is, you will need to withdraw thefirst $30,000 one year from today). Your uncle offers to putyou through school, and he will deposit in a bank paying 8.5%interest a sum of money that is sufficient to provide the 4payments of $30,000 each. His deposit will be made today. Donot round intermediate calculations. Round your answers tothe nearest cent. If your answer is zero, enter "0".a. How large must the deposit be?$b. How much will be in the account immediately after youmake the first withdrawal?How much will be in the account immediately after youmake the last withdrawal?LA

Present Value of Annuity: It is the present worth of the future annuity payments made at the end of…

Answered: Required Lump-Sum Payment To complete…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

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Required Lump-Sum Payment To complete your last year in business school and then go through law school, you will need $5,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $5,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 8.5% interest a sum of money that is sufficient to provide the four payments of $5,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". a. How large must the deposit be? $ 16,377.98 b. How much will be in the account immediately after you make the first withdrawal? After the last withdrawal? After the first withdrawal: $ After the last withdrawal: $ 0
Required Lump-Sum Payment To complete your last year in business school and then go through law school, you will need $5,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $5,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 7.43% interest a sum of money that is sufficient to provide the 4 payments of $5,000 each. His deposit will be made today. How large must the deposit be? Round your answer to the nearest cent. How much will be in the account immediately after you make the first withdrawal? Round your answer to the nearest cent.3. How much will be in the account immediately after you make the last withdrawal? Round your answer to the nearest cent. Enter "0" if required
Starting next year, you will need $5,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $5,000.) Your uncle deposits an amount today in a bank paying 7% annual interest, which will provide the needed $5,000 payments. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent.
Starting next year, you will need $5,000 annually for 4years to complete your education. (One year from today you will withdraw the first $5,000.)Your uncle deposits an amount today in a bank paying 6% annual interest, which will providethe needed $5,000 payments.a. How large must the deposit be?b. How much will be in the account immediately after you make the first withdrawal?
To help you reach a $16,000 goal 8 years fromnow, your father offers to give you $4,000 now.You plan to get a part-time job and make five additional deposits, one at the end of each year. (The firstdeposit is made at the end of the first year.) If all yourmoney is deposited in a bank that pays 6% interest,how large must your annual deposit be?
Check My Work еВook Starting next year, you will need $20,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $20,000.) Your uncle deposits an amount today in a bank paying 7% annual interest, which will provide the needed $20,000 payments. a. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent. $
You have been accepted at University. You will need $15,000 every six months (beginning six months from now) for the next three years to cover tuition and living expenses. Mom and Dad have agreed to pay for your education. They want to make one deposit now in a bank account earning 6% interest, compounded semiannually, so that you can withdraw $15,000 every six months for the next three years. How much must they deposit now?
Your son Tommy was just born today (Year 0), and you are plannjng for his college education. You would like to make equal depostis every 26 weeks into a college savings account starting in Year 1 and ending in Year 21 (41 deposits), so that Tommy can make annual withdrawala in Year 18, 19, 20, and 21 for tuition. Tuition is currently (Year 0) $2500/year, and it is expected to grow at 4%/year for each of the next 10 years, and then at 5%/year for all years after. You can earn a nominal annual rate or 8.45% with interest compounded weekly in a college savings account. How much must eaxh lf the 41 depostions be to exactly fund the expexted tuition expense?
A student plan to deposit $2,000 in the bank now and another $4,000 for the next 3 years. If he plans to withdraw $6,000 two years from after his last deposit for the purpose for buying shoes, what will be the amount of money left in the bank after one year of his with withdrawal? effective annual interest rate is 8%?
1. Starting next year, you will need $15,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $15,000.) Your uncle deposits an amount today in a bank paying 8% annual interest, which will provide the needed $15,000 payments. a. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. b.How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent. 2. You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $400. The loan will have a 12% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent. 3. You borrow $90,000; the annual loan payments are $12,852.25 for 30 years. What interest rate are you…
You decide that you need $47,000 in 3 years to make a down payment on a house. You plan to make annual fixed deposits to achieve your goal. If the interest rate is 2.5%, how much should be deposited each time? Hint use the Financial Function “PMT” to solve for the payment, and PV will be zero. You owe $25,000 to your parents. You promise to make 10 annual payments of $3,000 to settle your debt. What interest rate are your parents charging (estimated up to 2 decimal places), if you make the 10 annual payments beginning one year from now? Hint use the Financial Function “RATE”. Note if you need help use the “Help on this function” feature. This help will include an example for you to follow. You are offered an investment that will pay $14,000 per year for 17 years, beginning one year from now. If you feel that the appropriate discount rate is 3.4%, what is the investment worth to you today? Your grandparents offered you some money via the following options. Assuming an annual interest…
You need P4,000 per year for four years to go to college. Your father invested P5, 000 in 7% account for your education when you were born. If you withdraw P4, 00 0 at the end of your 17th, 18th, 19th and 20th birthday, how much will be left in the account at the end of the 21st year?

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