A pension fund is expected to produce a cash flow of $1,000 at the end of the upcoming year. This cash flow will grow at a rate of 10% for five years and then at the rate of 7% indefinitely. Assume the annual interest rate for pension-related investments is 12%. 1) What is the value of the pension fund?

Q: stment of 100,000 is to be used to make payments of 4,000 at the end of each quarter for as long as…

A: The payments are made periodically that carry the payment of principal amount and payment of…

Q: A trust fund is to be formed by depositing ₱4,000 every six months for 25 years in a bank that…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: an electrical engineer desires to set up fund by making uniform monthly end of period deposits for a…

A: first calculate the value at the end of the decade FV = 0, N = 3, PMT = 250,000, rate = (1+6%/12)12…

Q: You invested $11,500 at the end of each quarter for 6 years in an investment fund. At the end of…

A: Information Provided: Invested amount = $11,500 Years = 6 Future value of invested amount =…

Q: You can expect annual benefit of $15,800 if you deposit $142,200 in a bank account right now. The…

A: Pay back period is the period required to recover the initial cost of the project.

Q: An investor puts $2,000 into a deposit account with a fixed rate of return of 10% per year. A second…

A: The aggregate investment made by the investor will be considered as portfolio with $2,000 investment…

Q: An investment of $100,000 today will make advance quarterly payments of $4,000. If the annuity can…

A: We need to use NPER formula in excel to calculate number of periods to depleted annuity.  Formula is…

Q: You expect to receive a payout from a trust fund in 5 years. The payout will be for $12,200. You…

A: INTRODUCTION Present value of a cash flow needs to be multiplied by the CVF factor in order to…

Q: You require an annual return on your financial investments of 8% per annum. What would you be…

A: Semi annual payment (P) = £1,000 Annual interest rate = 8% Semi annual rate (r) = 8%/2 = 4% Period =…

Q: To pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: A company plans to place money in a new venture capital fund that currently returns 10.7% per year,…

A: Effective annual interest rate(EAR) refers to the real rate of return that we earn on our savings or…

Q: .The Janus Enterprise fund has as of April 2013 a 10-year average return of 12.54%. If Bobby Sue…

A: Future Value of Annuity = Annuity * [ ( 1 + Periodic rate)number of periods - 1 ] / Periodic rate

Q: Find the interest rate needed to accumulate $45,000 in a sinking fund in 10 years, with annual…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

Q: You recently invested $12,000 of your savings in a security issued by a large company. The secu-rity…

A: Given case is: You recently invested $12,000 of your savings in a security issued by a large…

Q: Cincinnati Company has decided to put $30,000 per quarter in a pension fund. The fund will earn…

A: Quarterly payment is $30,000. Maturity period is 10 years. Rate of interest is 6%. Compounding…

Q: Larry James is planning to invest $25,400 today in a mutual fund that will provide a return of 0.10…

A: We need to find the future value of investment of Mr.Larry James. Future value is the amount reccive…

Q: A pension fund portfolio begins with $500,000 and earns 15% the first year and 10% the second year.…

A: Therefore, the time-weighted rate of return is 12.47%.

Q: Sarasota Corporation, having recently issued a $20,134,100, 15-year bond issue, is committed to make…

A: Sinking Fund refers to amount which is set aside from profits to meet future known liability. It…

Q: n the following ordinary annuity, the interest is compounded with each payment, and the payment is…

A: In this we need to calculate monthly payment required for one million future value.

Q: Using a discount rate of 5.5% compounded annually, a pension fund estimates that the present value…

A: Rate sensitive assets and liabilities: The assets and liabilities whose prices change with changes…

Q: 3. Suppose that this fund has a midyear cash inflow of $ 20 million rather than an outflow. Would…

A: The time weighted rate of return is a tool that helps to compute the annual compound growth rate on…

Q: The managers of a pension fund have invested $1.5 million in U.S. government certificates of deposit…

A: Given: Amount = $1.5 million Interest rate = 2.6% Period = 20 years Compounding = semiannually

Q: An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at…

A: Question 1 is the case of ordinary annuity while question 2 is the case of an annuity due as the…

Q: Determine the annual payment required to fund a future annual annuity of $12,000 per year. You will…

A: Present value =cash flow×1-(1+r)-nr r = rate n = number of periods

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of year 4, $300…

A: Both future value and present value of a series of payments needs to be calculated.Please refer to…

Q: Semiannual deposits, beginning with $500 and increasing by $100 with each subsequent deposit, are…

A: a) Computation:

Q: If $90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of $23,138.32…

A: solution: Let interest rate earned = i Annual withdrawls = $23,138.32 Amount invested (Present value…

Q: Coronado Corporation, having recently issued a $ 20,153,400, 15-year bond issue, is committed to…

A: The question is based on the concept of Financial Management.

Q: A pension fund must pay out $1 million next year, $2 million the following year, and then $3 million…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Northern Flying Science is preparing to buy an aircraft estimated to cost $600,000 by making equal…

A: a)  Size of the quarterly payment N = 5*4 =20 I/Y = 8/4 = 2 PV =0 FV = -600,000 Compute PMT

Q: A 20-year annuity of forty $11,000 semiannual payments will begin 10 years from now, with the first…

A: Nominal Interest rate = ((1 + real rate / 12)^6 -1)*2 = (( 1 +14%/12)^6 - 1)*2 = 0.1441474102…

Q: How much should GlassilueCat invest in a fund to be able to withdraw $22.000 at the end of every 3…

A: Present Value  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: What is thevpresent value of an annuity of 1,600 per year for 10 years, with the first payment…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: You deposit the following at the end of each year into a growth mutualfund that earns 11 percent per…

A: a) Computation of worth of the fund:

Q: A no-load (commission-free) mutual fund has grown at a rate of 10% compounded annually since its…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: If a fund pays 12% compounded annually, what single deposit now will accumulate $12,000 at the end…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: A firm is required to make a payment at the end of each year for 9 consecutive years. The annual…

A: The formula to calculate the present value of future cash inflow is C/(1+r)n, where C is the cash…

Q: A fund is built with annual payments increasing by $1 from $1 to $10 and then decreasing by $1 to…

A: The answer to this question is a Palindromic annuity The formula to be used for solving this is,

Q: $3000 into the fund. If the investments grew at a rate of 8% per year over the 15 years, how much is…

A: Information Provided: Present value = $10,000 Interest rate = 8% Term = 15 years Annual deposit =…

Q: A 10-year annuity of twenty $10,000 semiannual payments will begin 12 years from now, with the first…

A: Semiannual payment (A) = $10000 Annuity duration (n) = 10 years = 20 periods First payment (CF)…

Q: An investment product promises semi-annual cashflows of $3,500 for the next 5 years. If the stated…

A: In this we have to calculate semiannual effective interest rate and than calculate the present value…

Q: Wildhorse Co. is considering investing in an annuity contract that will return $28,140 annually at…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…