Q: Your grandfather has offered you a choice of one of the three
Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now; $2,200 a year for nine years; or $31,000 at the end of nine years. Assuming you could earn 10 percent...
See AnswerQ: a. What is the present value of $140,000
a. What is the present value of $140,000 to be received after 30 years with a 14 percent discount rate? b. Would the present value of the funds in part a be enough to buy a $2,900 concert ticket?
See AnswerQ: You need $28,974 at the end of 10 years
You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial in...
See AnswerQ: Dr. Harold Wolf of Medical Research Corporation (MRC) was
Dr. Harold Wolf of Medical Research Corporation (MRC) was thrilled with the response he had received from drug companies for his latest discovery, a unique electronic stimulator that reduces the pain...
See AnswerQ: Beverly Hills started a paper route on January 1. Every three
Beverly Hills started a paper route on January 1. Every three months, she deposits $550 in her bank account, which earns 8 percent annually but is compounded quarterly Four years later, she used the e...
See AnswerQ: Franklin Templeton has just invested $9,260 for his son
Franklin Templeton has just invested $9,260 for his son (age one). This money will be used for his son’s education 18 years from now. He calculates that he will need $71,231 by the time the boy goes t...
See AnswerQ: Mr. Dow bought 100 shares of stock at $14 per
Mr. Dow bought 100 shares of stock at $14 per share. Three years later, he sold the stock for $20 per share. What is his annual rate of return?
See AnswerQ: C. D. Rom has just given an insurance company $
C. D. Rom has just given an insurance company $35,000. In return, he will receive an annuity of $3,700 for 20 years. At what rate of return must the insurance company invest this $35,000 in order to m...
See AnswerQ: Betty Bronson has just retired after 25 years with the electric company
Betty Bronson has just retired after 25 years with the electric company. Her total pension funds have an accumulated value of $180,000, and her life expectancy is 15 more years. Her pension fund manag...
See AnswerQ: Morgan Jennings, a geography professor, invests $50,000
Morgan Jennings, a geography professor, invests $50,000 in a parcel of land that is expected to increase in value by 12 percent per year for the next five years. He will take the proceeds and provide...
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