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_1_. Complete the tables and answer the question. Just type in the by xiuliliaofz

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									(1). Complete the tables and answer the question. Just type in the answers into the essay
box so far example (a) Table Factor X, Future Value $ X



Present Value Rate Time Compount Frequency Table Factor Future Value

$5,000         12% 2yrs.     Annual        2         1.2544        $6,272

$5,000         12% 2yrs. Semiannual        4         1.26248       $6,312.4

$5,000         12% 2yrs . Quaterly         8         1.26677       $6,333.85

$5,000         12% 2 yrs    Monthly      24         1.26973        $6,348.65



(2). Cindy has decide to retire in 24 years. She has $30,000 available today and wants to
invest the money to supplement her pension plan.

(b). Assune Cindy wants to accumulate $150,000 by her retirement date. Will she achieve
her goal if she invests $30,000 today and earn 6 percent? Show your calculation to support
your yes/no answer

FV = PV(1.06)24 = $30,000(4.04893)=$121,468

Answer : No,she won´t achieve $150,000



(a). If Cindy invests a total of $30,000 through a series of 24 equal annual installment at the
end of the year instead of a single amount, would Cindy accumulate the desire $100,000 at
the 6 percent annual interest? The first first investment would be made one year from today.
Please show your calculation to support your answer.

Each payment is $30,000/24=$1250

Using table 2 factor value = 50.81558

So amount = $1250(50.81558)=$63,519.48

Answer: No, she will achieve less than 100,000
(3). Rusty Smith plans to choose one of three investments

(A) Pays $2,500 at the end of each year for three years.

Investment (B) Pays $8,500 at the end of five years.

Investment (C) Pays $1,000 at the end of each years and pay $4,000 at the end of the fifth
year.

Rusty requires a rate of 7 percent on each of these investments.

(a). What is the present value of investment A?

PV =                          = $ 6,560.79

Answer: $ 6,560.79



(b). What is the present value of investment B?

PV =         = $ 6,060.38

Answer: $ 6,060.38

(c). What is the present value of investment C?

PV =                                              =$4,100.2

Answer: $4,100.2



4. You have decide to purchase a boat. You have found a well-running boat that will cost
you $29,500. You can finance your purchase through the dealer at an annual rate of 24
percent for 24 months. The dealer requires a down payment of $8,000.

(a). What will be the amount of your monthly payment

From the factor table r = 0.24/12=0.02, n=24 then factor =18.91393

Initial amount= $29,500 - $8,000= $ 21,500

Each payment = $21,500/18.91393 = $ 1136.728
Answer: $ 1136.728




(b). What will be the total amount paid to the dealer over the life of the loan.

$ 8,000+24($ 1136.728)= $ 35,281.47

Answer: $ 35,281.47

(c). What will be the total amont of insterest paid

I=$ 35,281.47- $ 29,500= $ 5,781.47

Answer: $ 5,781.47

								
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