You win a judgment in an auto accident case for $135,000. You immediately receive $20,000 but must pay your lawyer's fee of $15,000. In addition, you will receive $4,000 a year for 25 years for a total of $100,000, after which the balance owed ($15,000) will be paid. If the interest rate is 6 percent, what is the current value of your settlement? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $

You win a judgment in an auto accident case for $135,000. You immediately receive $20,000 but must pay your lawyer's fee of $15,000. In addition, you will receive $4,000 a year for 25 years for a total of $100,000, after which the balance owed ($15,000) will be paid. If the interest rate is 6 percent, what is the current value of your settlement? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $

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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Problem 7-23 You win a judgment in an auto accident case for $142,500. You immediately receive $20,000 but must pay your lawyer's fee of $5,000. In addition, you will receive $3,500 a year for 25 years for a total of $87,500, after which the balance owed ($35,000) will be paid. If the interest rate is 6 percent, what is the current value of your settlement? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.$
QUESTION 14 You purchase a home priced at 1,750,000 Php. You paid 10% as the down payment and the remaining balance under a bank amortization plan to be paid in 8 years. At an effective quarterly interest rate of 1.5%, How much interest will you pay in the 2nd year Solve on the white paper or typed. Not explain in the excel.
QUESTION 5 Carl plans to retire in 4 years with $519,000.00 in his account. If he receives payments of $114,705.29 per year and he receives his first $114,705.29 payment in 4 years and his last $114,705.29 payment in 8 years, then what is the expected annual return for his account? O 12.91% (plus or minus 1 bps) O 3.43% (plus or minus 1 bps) O 5.26% (plus or minus 1 bps) O 8.71% (plus or minus 1 bps) O none of the answers are within 1 bps of the correct answer
K 1 As part of your retirement plan, you have decided to deposit $6,000 at the beginning of each year into an account paying 4% interest compounded annually. (Round your answers to the nearest cent.) (a) How much (in $) would the account be worth after 10 years? (b) How much (in $) would the account be worth after 20 years? $ (c) When you retire in 30 years, what will be the total worth (in $) of the account? $ (d) If you found a bank that paid 6% interest compounded annually rather than 4%, how much (in $) would you have in the account after 30 years? $ 7 (e) Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $500 at the beginning of each month instead of $6,000 at the beginning of each year. $ A ? @ 2 W S # 3 LIT 14 $ 4 R 이트 F C 1540 % 5 V T 16 4- 6 ¹7+ B & Y 7 G H fao N . 8 D 144 ( 1 M 9 K to Dill O DDI 2 V .. { || C…
Problem 7-15 You are offered $1,100 after six years (Offer 1) or $150 a year for six years (Offer 2). If you can earn 6 percent on your funds, calculate the future values of both payments. Use Appendix C to answer the question. Round your answers to the nearest dollar.FV(Offer 1): $ FV(Offer 2): $ Which offer will you accept?
Problem 6 What is the annual equal amount of money you have to set aside to guarantee yourself an annual income to perpetuity of $15,000 starting in 41 years from now? You make the first payment in three years from now and the last payment in 40 years. Assume an interest rate of 7% (EAR).
Problem 4 and 5-3 Future Value and Number of Annuity Payments Your client has been given a trust fund valued at $1.18 million. He cannot access the money until he turns 65 years old, which is in 25 years. At the time, he can withdraw $21,000 per month. If the trust fund is invested at a 4.5 percent rate, how many months will it last your client once he starts to withdraw the money? (Assume annual compounding. Do not round intermediate calculations and round your final answer to 2 decimal places.) Number of months 156.48
Question Two: You agreed to pay your parents back for the $5000 loan they extended you for your. education. You and your parents agree that a fair effective annual rate of interest is 12% percent. Required: If you will repay the loan in a single lump sum, how much do you need to repay at the end of: a. 1 year b. 5 years c. 10 years d. 20 years
Question 11 You plan to deposit $300 at the end of every year for 12 years starting at the end of year 1. Then after leaving the money in the account for several years, you plan to withdraw everything 15 years from today. How much is available to withdraw at the end of year 15 if the account pays 8% interest annually? Question 3 Part C: Provide the value that can be withdrawn. Enter your answer in the form: 12345.67
Question 3: 1 Salem wishes to withdraw AED 30,000 at the end of each year of the next 6 years from his bank account that pays 10% interest compounded annually. Required: a. How much does Salem need to invest today to meet this goal? b. Which annuity (ordinary annuity or annuity due) is better for Salem's situation
6. Present value of annuities Your uncle has said that if you agree to finish college he will give you equal payments of $1,000 at the end of each year for the next eight years. If the annual interest rate stays constant at 6%, what is the value of these payments in today’s dollars? (Note: Round your answer to the nearest whole dollar.) $6,583 $5,279 $6,210 $7,763 You found out that now you are going to receive payments of $7,000 for the next 14 years. You will receive these payments at the beginning of each year. The annual interest rate will remain constant at 14%. What is the present value of these payments? (Note: Round your answer to the nearest whole dollar.) $64,661 $42,015 $38,318 $47,897
Question 12 You just received an insurance settlement offer related to an accident you had three years ago. The offer provides you with three choices: • Option A: $1,500 a month for 6 years • Option B: $1,025 a month for 10 years • Option C: $85,000 as a lump sum payment payable today You can earn 7.5 percent on your investments and do not care if you personally receive the funds or if they are paid to your heirs should you die within the settlement period. Which option should you select and why is that option justified? 0000 1 pts Option A: It provides the largest monthly payment. Option A: It has the greatest value today. Option C: It is all paid today. Option B: It pays the largest total amount.

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