A senior executive is offered a buyout package by his company that will pay him a monthly benefit for the next 20 years. Monthly benefits will remain constant within each of the 20 years. At the end of each 12− month period, the monthly benefits will be adjusted upwards to reflect the percentage increase in the CPI(an inflation rate). You are given:

Q: An investor has purchased an investment which offers him 30 annual payments of dollar 1,200 per…

A: To find the present value of the investment, we will first define where the payments are made. We…

Q: Under a new company employees savings plan, an employee will pay P 250 at the beginning of each…

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

Q: You are planning to retire in 25 years time. Immediately after your retirement, you wish to go for a…

A: We are required to find the solution to this question with the help of an Excel  Formula,

Q: Neal plans to buy a car worth $42,000 today. He is required to pay 15  percent as a down payment and…

A: Using Excel PMT function

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: Assume that you will have a 10-year, $14,000 loan to repay when you graduate from college next…

A: Given, Loan amount = $14,000 Annual payment = $2,377 Interest expense = 11%

Q: A construction firm wishes to give each 80 employees a holiday bonus. How much is needed to invest…

A: Annuity refers to the fixed periodic payments which are paid monthly, quarterly, semi-annually or…

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Suppose a man receives an initial annual salary of 60000, increasing at the rate of 5000 a year. If…

A: Initial amount (P)= 60000 Increasing amount per year (g)= 5000 or 8.33% growth per year Rate= 10%…

Q: The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How…

A: Given that : Compounded = quarterly Bonus for 50 employees = $1200 x 50 = $60,000 Principal = ? The…

Q: Assume that today is the first day of the month and that it is also your first day of retirement.…

A: The question is based on the concept of periodic payment as annuity payment Formula as,…

Q: TA Corp. has a consulting contract with a firm that states that he will receive annual payments of…

A: We need to use present value of annuity due(payment due at beginning of year) formula for…

Q: A man is planning to retire in 20 years. He can deposit money for his retirement at 8% compounded…

A:

Q: A new employee plans to receive 760,000 TL individual retirement bonus when he retires. According to…

A: a) this an example of an ordinary annuity all we need is to find out the premium which is the…

Q: You have approached Which Bank for a loan to buy a house. The bank offers you a $400 000 loan,…

A: Given Information:Loan amount is $400,000 Interest rate is 9% (compounded monthly) Loan tenure is 20…

Q: Your employer gives you a stock bonus of $1,000 in your company at the beginning of each year. You…

A: Stock Bonus = $ 1000 each year Rate of Growth(r) = 15% Future value of annuity = I *[{(1+r)^(n+1) /r…

Q: The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How…

A: The total number of employees is 50 and the total bonus to be received is $60,000 (50 employees ×…

Q: A man is planning to retire in 20 years. He can deposit money for his retirement at 8% compounded…

A: Answer: Nominal interest rate = 8% Inflation = 3% Real interest rate = (1.08)(1.03)-1 = 4.85%…

Q: The president of a growing firm wishes to give each of 20 employees a holiday bonus. How much is…

A: Nominal interest rate: It is the rate in which the effect of accounting has not been taken.

Q: An individual makes rental payments of $1,200 per month and wants to know the present value of their…

A: Present value is the value which is defined the value today for periodic deposits or the future…

Q: An insurance company receives 40,000 Rials annually for 10 years and pays the first pension after 5…

A: Value at end of deposit period is calculated by future value of annuity. Value at beginning of…

Q: Assume that you are 30 years old today (t=0), and that you plan to retire at age of 65 (t=35). Your…

A: An annuity is a series of payments with a fixed number of instalments of the same quantity and made…

Q: You have finished your time at Kelley and need to start thinking about retirement. You plan on…

A: Given: amount required after retirement at every six months = $75,000 Period of service = 30 years…

Q: The president of a growing engineering firm wishes to give each of 20 employees a holiday bonus. How…

A: Given information: Number of employees 20 Nominal rate is 12% Future value is $2,500

Q: Assume that you will have a 10-year, $20,000 loan to repay when you graduate from college next…

A: Note: As per the Policy, We’ll answer the first question since the exact one wasn’t specified.…

Q: You just signed a business consulting contract with one of your clients. The client will pay you…

A: Inflation free interest rate is that rate which has been adjusted for inflation. It is calculated…

Q: Prepare an amortization schedule showing how much money you will need to save to pay the entire…

A: Amortization Schedule: Amortization schedule represents a table containing information about…

Q: You decide to invest in an instrument that pays 5% annual capitalizable interest each semester. If…

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

Q: Mr. Gordon plans to invest $600 at the end of each month in an account that pays 12%, compounded…

A: a) An ordinary annuity may be a set of identical installments paid over an indicated sum of the time…

Q: A new employee plans to receive 760,000 TL individual retirement bonus when he retires. According to…

A: In case of ordinary annuity, the amount of periodic payment is being considered at the end of the…

Q: If you have been hired at an annual salary of $23000and expeck to receive annual increases of 5%…

A: Your annual wage is the amount of money paid to you by your employer over the course of a year in…

Q: What is the comparable salary today, assuming an inflation rate of 6% compounded annually?

A: Insurance: Insurance is a type of risk covering instrument which a person can avail to cover it's…

Q: A mechanical contractor is trying to calculate the present worth of personnel salaries over the next…

A: given that: interest rate= 12%= 0.12 n (no. of period)= 5 years 1st year salaries=$150000 (S) since…

Q: An investment promises to pay into an account that pays you 6 percent annually, $150 per month for…

A: Time value tells that the money received today has more value than that of receiving the same amount…

Q: If the interest rate is 9 percent compounded monthly, what is the value today of each option?

A: Present Value: It represents the present worth of the future sum of the amount or future annuity…

Q: An investor is considering an investment that will pay $2,150 at the end of each year for the next…

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

Q: A person plans to make a series of equal quarterly deposits of $1,500 each into a savings account,…

A: Equal Quaterly deposits are of $1,500 Interest rate is 6.5% compounded daily Time period is 10 years…

Q: Assume that you contribute $150 per month to a retirement plan for 15 years. Then you are able to…

A: This question provides that $ 150 per month for 15 years and increases the $ 350 per month for next…

Q: The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How…

A: Here, No. of Employees is 50 Bonus of Each Employee is $1,200 Total Bonus Required is:…

Q: The president of a growing firm wishes to give each of 19 employees a holiday bonus. How much is…

A: Total bonus needed=(19 employees×$1000)=$19000n=12 monthsr=3% compounded monthly

Q: a. You plan to invest $5,000 in an individual retirement arrangement today at a nominal annual…

A: Future value is the value of current asset or investment at a future date. Future value is…

Q: The manager has 5 employees whose combined salaries through the end of this year are $300,000. If he…

A: The current worth of funds to be received in the future with one or more payments, discounted at a…

Q: An investor deposits a sum of Rs 100,000 in an investment company with a promise of a rate of return…

A: The effective annual rate is the rate of interest an investment generates after taking all the…

Q: An engineer wants to have P100,000 at the end of three years. How much would the engineer have to…

A: Present  value is calculated by discounting the future value with the rate of interest.   Present…

Q: A pension fund is making an investment of $100,000 today and expects to receive $1,600 at the end of…

A: The internal rate of return is the rate at which the present value of cash inflows is equals to the…

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.