You have been offered a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra $67,000 every 7 years, starting 7 years from now. What is the present value of this incentive if you plan to work for the company for 42 years and the interest rate is 4% (EAR)? (Note: Be careful not to round any intermediate steps less than six decimal places.) The present value f this incentive is $ (Round to the nearest cent.)

You have been offered a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra $67,000 every 7 years, starting 7 years from now. What is the present value of this incentive if you plan to work for the company for 42 years and the interest rate is 4% (EAR)? (Note: Be careful not to round any intermediate steps less than six decimal places.) The present value f this incentive is $ (Round to the nearest cent.)

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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Assume that you contribute $5,000 per year to a retirement plan for 20 years. Then you are able to increase the contribution to $7,500 per year for another 20 years. Given an 8.0 percent interest rate, what is the value of your retirement plan after 40 years? Hint: This is equivalent to saving $5,000 each year for 40 years (from year 1 to year 40) and $2,500 each year for 20 years (from year 21 to year 40) O $$1,455,270 O $1,409,688 O $$1,492,875 O $1,411,904
BONUS: If you expect to receive the following cash flow at the end of each year, what is the fair price of this financial contract that you should be willing to pay? Assume 5% interest rate, and round your answer to the nearest hundredth decimal point. Year 1 2 3 4 CF $1000 $2000 $3000 $7000
You are considering purchasing an investment contract that will eventually pay you $4,000 per year at the end of each year for seven years. The appropriate interest rate for the risks involved is 6.4% The first payment begins in 6 years. What price should you pay today to purchase this contract (rounded to nearest dollar) ? (Do not round interim calculations)
You are planning to purchase an investment today. The investment will pay you Rs. 13,000/= at the end of every year for the next 8 years. From 11th year onwards the payment will be decreased to Rs. 12,000/= and will be paid forever. The discounting factor the will be remain unchanged at 10% per annum. Determine whether you will purchase the investment today if it has a purchase price of Rs. 110,000/=.
Imagine you received two offers. You need to decide which one means more money for you! OFFER #1: Right away, you receive $2,470,000. Also, you will receive 40 back-to-back payments of $1,235,000 each, six months apart, and the first one of these will take place in one year. The discount rate is 8 percent, with daily compounding. OFFER #2: Right away, you receive $27 million. And nothing else in the future. To make your decision, you need to first figure out how much Offer #1 is worth to you in today's dollars. The answer is: $ (Assume thirty days in each month and twelve months in each year.) (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 12.34.) Present value
You have been pffored a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra S00,000 every seven yearn, staring seven years from now What is the present valle of this incentive if you plan to work for the company for 42 years and the interest rate is 6.3% (EAR)? (Note: Be carefu not to round any intermediate steps less than six decimal places) The present value of this inoentive is S (Round to the nearest doliar.)
4. You want to buy a house that costs $620,000. You can put $55,000 down. You get a 30 year fixed-rate loan with an APR of 4.5% compounded monthly. Mor Determine the monthly payment. Show clear work. Work: Work: Answer: Find the total closing costs if they consist of a fee of $1600 and 3 points. Answer: www Suppose that you invest $4800 in an account with an APR of 6.9%, compounded continuously. Determine how much you will have after 3 years. Assume that no additional deposits are made.
b. Suppose that you are given two options to choose. Offer A offers you a monthly payment of $10,000 per year for 10 years (paid annually at the beginning of each year) or a lump sum of $x now. Determine the minimum value of x that would induce you to accept the lump sum given the current market interest rate of 5%.
The stock market has an average annual return of 10% per year. We will consider the annual return to be an annual interest rate Suppose instead you want to put a 15% down payment on a $500,000 house in Texas. If you get a $6000 signing bonus from your first post-college job, how long would it take for you to pay for the down payment on this house using your signing bonus (assuming 10% annual interest compounded annually)?
You have been offered a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra $ 66 comma 000 every 7 years, starting 7 years from now. What is the present value of this incentive if you plan to work for the company for 42 years and the interest rate is 5% (EAR)? (Note : Be careful not to round any intermediate steps less than six decimal places.)
Select the best answer for the question. 20. You want to invest money for three years in an account that pays nine-percent interest annually. How much would you need to invest today to reach a future goal of $12,000? (Round your answer to the nearest dollar.) A. $10,984 OB. $10,100 OC. $11,432 OD. $9,266
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