Questions from Personal Finance

Q: What is the present value of a $20,000 sum

What is the present value of a $20,000 sum to be given six years from now if the discount rate is 8 percent?

Q: What is the future value of an investment of $18,

What is the future value of an investment of $18,000 that will earn interest at 6 percent and fall due in seven years?

Q: Jason was promised $48,000 in 10 years if he

Jason was promised $48,000 in 10 years if he would deposit $14,000 today. What would his compounded annual return be?

Q: How many years would it take for a dollar to triple in

How many years would it take for a dollar to triple in value if it earns a 6 percent rate of return?

Q: Marcy placed $3,000 each year into an investment returning

Marcy placed $3,000 each year into an investment returning 9 percent a year for her daughter’s college education. She started when her daughter was two. How much had she accumulated by her daughter’s...

Q: Todd was asked what he would pay for an investment that offered

Todd was asked what he would pay for an investment that offered $1,500 a year for the next 40 years. He required an 11 percent return to make that investment. What should he bid?

Q: Ann was offered an annuity of $20,000 a year

Ann was offered an annuity of $20,000 a year for the rest of her life. She was 55 at the time, and her life expectancy was 84. The investment would cost her $180,000. What would the return on her inve...

Q: When it came to investments, Richard and Monica could agree on

When it came to investments, Richard and Monica could agree on only one thing—that they would have a tough time reaching a decision on asset allocations and individual investments. Previously, Monica...

Q: Explain the relationship of life cycle theory to retirement planning.

Explain the relationship of life cycle theory to retirement planning.

Q: Explain the difference between a defined benefit and a defined contribution plan

Explain the difference between a defined benefit and a defined contribution plan.