You’ve invested your savings at 8% and been able to accumulate $500,000. If you withdraw $50,000 at the end of every year, how long until the balance has been reduced to zero? a. 20.91 years b. 10.00 years c. 18.49 years d. 13.91 years e. 7.63 years

question 20

3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank compounds interest at a 4 percent annual rate. A. How much do you need to deposit today in order to have a balance of $10,000 in 10 years? Explain and show your work. B. Suppose instead that you want to make equal payments in years 1 through 9 to accumulate $10,000 in year 10, how large must each of the 9 payments be? Explain. C. If your (very reliable) uncle were to offer to make the payments found in part (B) for you or to give you $7,000 one year from now, which would you choose? Explain. (Even if you could not solve for the answer in part B, please explain what criterion you would use to make the choice.)4. Capital Asset Pricing Model 4. Capital Asset Pricing Model In parts (A), (B), and (C) below assume that the risk-free interest rate is 3 percent and the market risk premium is 7 percent. A. Dorothy Inc. is considering a project that will generate after-tax annual cash flows of…

You plan to withdraw the amounts given below over the next five years from a savings account that earns 9% interest compounded annually, how much do you need to deposit now? End of Year 1 $0.00   Year 2   $24,000.00,      Year 3     $14,000.00 Year 4    $26,000.00   Year 5    $42,000.00

6

Suppose you have $1,000,000 in savings account when you retire. Your plan is to withdraw $6,000 a month as retirement income from this account.  You expect to earn annual interest of 5%, compounded monthly, on your money during your retirement.  How many months can you be retired until you run out of money? A-210.83 B-262.59 C-220.27 D-285.14

You invested $4,800 into an account.  Your balance is now $14,400.  Your compound annual rate of return was 4.65%.  How long ago did you open the account?   Question 4 options:   25.1 years   26.4 years   24.2 years   27.6 years   28.1 years

How long will it take $52,000 placed in a savings account at 10% interest to grow into $77,000? 5.12 years O 3.12 years O4.12 years O 6.12 years

5. You take $100 to your local savings bank to invest for five years. You are given the choice of two investments by the banker Notifications Time Left 00:00:28 ? Guide Me 1. You can Invest in a regular savings account that pays you 14.00% interest each year with interest compounded annually. That is each year the interest you can gets deposited in your bank account and earns interest until the end of the five years. it. You can invest in a special account that pays you 20.00% interest each year, the catch is that the interest does not compound, Rattier each year the interest payrrient is put into a special account which collects no further interest and cannot be reinvested anywhere until the end of the five years Which option should you select and why? a, Select Option i: It earns $44.63 more than Optianill b. Both Options earn you the same amount of money so you are indifferent between the two c. Select Option it It earns $7.46 more than Option d. Select Option it It earns $30.00…

If you deposit money today in an account that pays 7% annual interest, how long will it take to triple your money? 13.24 years 1,570.00 years 0.35 years 16.24 years