When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $6. Based on actuarial tables, "Joltin' Joe" could expect to live for 36 years after the actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of the flowers will increase at 4.7 percent per year, when expressed as an EAR. Assuming that each year has exactly 52 weeks, what is the present value of this commitment? Joe began purchasing flowers the week after Marilyn died.
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- When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $10. Based on actuarial tables, “Joltin’ Joe” could expect to live for 25 years after the actress died. Assume that the EAR is 8.8 percent. Also, assume that the price of the flowers will increase at 3.7 percent per year, when expressed as an EAR. Assume that each year has exactly 52 weeks and Joe began purchasing flowers the week after Marilyn died. What is the present value of this commitment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $5. Based on actuarial tables, "Joltin' Joe" could expect to live for 31 years after the actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of the flowers will increase at 4.6 percent per year, when expressed as an EAR. Assuming that each year has exactly 52 weeks, what is the present value of this commitment? Joe began purchasing flowers the week after Marilyn died.When Marilyn Monroe died, ex - husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $8. Based on actuarial tables, "Joltin' Joe" could expect to live for 15 years after the actress died. Assume that the EAR is 8.3 percent. Also, assume that the price of the flowers will increase at 3.5 percent per year, when expressed as an EAR. Assume that each year has exactly 52 weeks and Joe began purchasing flowers the week after Marilyn died. What is the present value of this commitment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $5. Based on actuarial tables, “Joltin’ Joe” could expect to live for 20 years after the actress died. Assume that the EAR is 9 percent. Also, assume that the price of the flowers will increase at 3.4 percent per year, when expressed as an EAR. Assume that each year has exactly 52 weeks and Joe began purchasing flowers the week after Marilyn died. What is the present value of this commitment?Catherine buys and sells real estate. Two weeks ago, she paid $300,000 for a house on Pine Street, intending to spend $50,000 on repairs and then sell the house for $400,000. Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Catherine purchased. As a result of the city’s announced plan, Catherine is weighing two alternatives: She can go ahead with the $50,000 in repairs and then sell the house for $290,000, or she can forgo the repairs and sell the house as it is for $250,000. What should Catherine do?Shemar and Jordan are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,900 per year into a trust fund for Shemar on his 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate's trustee) will make 40 more $2,900 payments until a 46th and final payment is made on Shemar's 65th birthday. The grandfather set things up this way because he wants Shemar to work, not be a "trust fund baby," but he also wants to ensure that Shemar is provided for in his old age. Until now, the grandfather has been disappointed with Jordan, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Jordan. He will make the first payment to a trust for Jordan today, and he has instructed his trustee to make 40 additional equal annual payments until Jordan turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of…
- Shemar and Jordan are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,900 per year into a trust fund for Shemar on his 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate's trustee) will make 40 more $2,900 payments until a 46th and final payment is made on Shemar's 65th birthday. The grandfather set things up this way because he wants Shemar to work, not be a "trust fund baby," but he also wants to ensure that Shemar is provided for in his old age. Until now, the grandfather has been disappointed with Jordan, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Jordan. He will make the first payment to a trust for Jordan today, and he has instructed his trustee to make 40 additional equal annual payments until Jordan turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of…As soon as she graduated from college, Kay began planning for her retirement. Her plans were to deposit $500 semiannually into an IRA (a retirement fund) beginning six months after graduation and continuing until the day she retired, which she expected to be 30 years later. Today is the day Kay retires. She just made the last $500 deposit into her retirement fund, and now she wants to know how much she has accumulated for her retirement. The fund earned 10 percent compounded semiannually since it was established. a. Compute the balance of the retirement fund assuming all the payments were made on time. b. Although Kay was able to make all of the $500 deposits she planned, 10 years ago she had to withdraw $10,000 from the fund to pay some medical bills incurred by her mother. Compute the balance in the retirement fund based on this information.Nadine is retiring at age 62 and expects to live to age 85. On the day she retires, she has $1,650,000 in her retirement savings account. She is somewhat conservative with her money and expects to earn 6 percent during her retirement years. How much can she withdraw from her retirement savings each month if she plans on giving $300,000 to her grandson on the morning of her death? PLEASE SHOW WORK
- a) Catherine buys and sells real estate. Two weeks ago, she paid $300,000 for a house on Pine Street, intending to spend $50,000 on repairs and then sell the house for $400,000. Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Catherine purchased. As a result of the city’s announced plan, Catherine is weighing two alternatives: She can go ahead with the $50,000 in repairs and then sell the house for $290,000, or she can forgo the repairs and sell the house as it is for $250,000. What should Catherine do? (b) Consider your decision whether to go skiing for the weekend. Suppose transportation, lift tickets and accommodation for the weekend costs $300. Suppose also that restaurant food for the weekend will cost $75. Finally, suppose you have a weekend job that you will have to miss to go skiing, which pays you $120. Calculate the opportunity cost of going skiing? Do you need any other information about computing the…On her 31st birthday, Jean invests $1,000 into her employer’s retirement plan, and she continues to make annual $1,000 payments for 10 years. So her total contribution (principal) is $10,000. Jean then stops making payments into her plan andkeeps her money in the savings planuntouched for 25 more years. Doug starts putting money aside on his 41st birthday when he deposits $1,000, and he continues these payments until he gets to be 65 years old. Doug’s contributed principal amounts to $25,000 over this period of time. If Jean’s and Doug’s retirement plans earn interest of 6% per year, how much will they have accumulated (principal plus interest) when they reach 65 years old? What is the moral of this situation?Milhouse, 22, is about to begin his career as a rocket scientist for a NASA contractor. Being a rocket scientist, Milhouse knows that he should begin saving for retirement immediately. Part of his inspiration came from reading an article on Social Security in Time. The article indicated that the ratio of workers paying taxes to retirees collecting checks will drop dramatically in the future. In fact, the number will drop to two workers for every retiree in 2040. Milhouse’s retirement plan allows him to make equal yearly contributions, and it pays 9 percent interest annually. Upon retirement, Milhouse plans to buy a new boat, which he estimates will cost him $300,000 in 43 years, which is when he plans to retire (at age 65). He also estimates that in order to live comfortably he will require a yearly income of $80,000 for each year after he retires. Based on his family history, Milhouse expects to live until age 80 (that is, he would like to receive a payment of $80,000 at the end of…