Choose the best retirement plan for the employee from among those presented below. Effective interest is 12.68% pa. a. P1.4M now b. P64,000/month for 2 years c. P1.65M on the 18th month d. P100,000/month for 1 year plus P400,000 after one year

Choose the best retirement plan for the employee from among those presented below. Effective interest is 12.68% pa. a. P1.4M now b. P64,000/month for 2 years c. P1.65M on the 18th month d. P100,000/month for 1 year plus P400,000 after one year

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 16PROB

See similar textbooks

Related questions

Q: were employed by Cỏ. for 20 years nd retired on 30 September 2020 at the ge of 57. This income year…

A: Health Cover Insurance Policy: It is the health insurance policy which give cover for the health…

Q: Julie has just retired. Her company's retirement program has two options as to how retirement…

A: Solution 1a: Present value of first option = Lump sum immediate payment = $158,000 Present value of…

Q: Ms. Lun is earning P20,000 per month. She plans to invest in an insurance company an amount…

A: Monthly Earning of Ms. Lun P20,000 Annual Earning of Ms. Lun (P20000 * 12) P2,40,000 Amount…

Q: Consider a company that recruited 500 20- year-olds on employment date. The base salary for each of…

A: Contribution Period = 45 years Base Salary = 100,000 Effective Annual Rate = 5% Monthly Rate = 5%/12…

Q: Jason has an opportunity to save $145 per month at an APR of 5.75% in a 401K plan through work. He…

A: 401K is retirement plan offered by different financial institution in which individuals make monthly…

Q: What should be the balance in a Registered Retirement Income Fund (RRIF) that will provide $2,000 at…

A: The balance of the fund is equal to the sum of the present values of all future receivables. The…

Q: At age 25, you start work for a company and are offered two retirement options. Retirement option 1:…

A: Compound Interest: It is the interest earned on interest. It is calculated depend on initial…

Q: What should be the balance in a Registered Retirement Income Fund (RRIF) thật will provide $3,000 at…

A: FV = PV (1 + r/n)nt where, FV = Future ValuePV = Present Valuer = rate of interestt =…

Q: Question 1 (a) Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A self-employed person deposits $2,000 annually in a retirement account (called a Keogh or H.R. 10…

A: The value of current asset for the future date based on the growing interest will be known as the…

Q: Joe’s starting salary as a mechanical engineeris around $75,000. Joe is planning to place a total…

A: Formula for Joe's earnings on retirement is: P*[(1+r)^n - (1+g)^n] /(r-g) where P is the first…

Q: 2. An employee plans on working and contributing to his retirement account monthly for 32 years and…

A: Annuity refers to series of equalized payments that are received or paid either at start or end of…

Q: Calculate the hourly recovery tarrif (rounded to the nearest cent) of Brenda from information below…

A: The hourly recovery tariff is the per working hour rate that the corporation is actually paying its…

Q: 4. On retirement, Gilbert finds that his share of a pension fund is P1 500 000. If the fund is…

A: Standard Disclaimers“Since you have asked multiple question, we will solve the first question for…

Q: How many dollars would be the retirement pension if the person at the age of 65 wants to change…

A: Retirement planning is about forming plans in order to accomplish retirement expenses and retirement…

Q: unt and use the funds to buy an investment grade bond which makes $50,000 annual coupon payments…

A: Given as, Annuity sum required after 30 years for 20 year is $50,000 Annual coupon rate is 6%…

Q: S benefit is $4,194 (A

A: The social security benefit is the benefits which are received by the employee once the said…

Q: re in 20 years. She opens up a retirement account with an APR of 5.25% compounded monthly. She will…

A: There is need of proper planning for the retirement and if there is proper planning on time better…

Q: Charles started working $30,500. Salaries expect to increase year's salary for each year of service…

A: Answer: 2727

Q: Answer the following questions using Excel's RATE, NPER, PMT, PV and FV functions. 2. What sum of…

A: The investment amount is the present value of the monthly payments.

Q: Kelly Malone plans to have $58 withheld from her monthly paycheck and deposited in a savings account…

A: Given Periodic Cash flow = $ 53 Table values are based on n = 18 periods (1.5 yrs *12) i= 1% (12%…

Q: A new employee puts 4% of his salary of $65,000 into a retirement account, and his employer matches…

A: salary = $65,000 employee contribution=4% of salary=$65,000x 0.04=$2600 employer contribution=3% of…

Q: Mick plans to start saving money for retirement. By taking 10% of monthly gross income. Mick is able…

A: We can use the concept of time value of money here. As per the concept of time value of money the…

Q: You begin working at age 25, and your employer deposits $310 each month into a retirement account…

A: The future value of an annuity is the future worth of a series of cash flows at a certain rate of…

Q: A self-employed person deposits $4,000 annually in a retirement account (called a Keogh or H.R. 10…

A: 1). Number of periods = 65 - 50 Number of periods = 15 Future value = Annuity * [(1 + rate)^periods…

Q: A retiree invests $8,000 in a savings plan that pays 6% per year. What will the account balance be…

A: The future value of money is considered as the sum of money received after a period of time at a…

Q: ason Horton works for Chevron as a welder on offshore drilling rigs. His retirement plan…

A: a) Calculate the future value of the annuity as shown below: Hence, the future value of the annuity…

Q: Charles started working for $30,500. Salaries expect to increase by 2.5% per year. He is entitled to…

A: Pension funds are saved to provide financial cushion at the age of retirement. Pension funds are of…

Q: Gail Trevino expects to receive a $590,000 cash benefit when she retires eight years from today. Ms.…

A: Capital budgeting: It is a method of evaluating the projects which required huge investments and…

Q: A self-employed person deposits $3,000 annually in a retirement account (called a Keogh or H.R. 10…

A: Amount deposited annually in a retirement account, A = $ 3,000Since this is deposited every year,…

Q: Find the final amount in the following retirement account, in which the rate of return on the…

A: We will treat this as 2 annuities and find their future values separately and then add at the end to…

Q: NEED HELP ASAP! An employee is entitled to a 10 yearly grant of 25,000 pesos each starting at the…

A: Present value refers to the current value of a sum of money in the future at a specified interest…

Q: A retired employee accumulated an amount of P1.5 M on his retirement account. Instead of taking as…

A: The present value is the amount of money that would be needed today to achieve those future cash…

Q: Charles started working $30,500. Salaries expect to increase by 2.5% year's salary for each year of…

A: "His pension payment will be paid at the beginning of each retirement year is 2727".

Q: (Pension Funding) You have been hired as a benefit consultant by Jean Honore, the owner of Attic…

Q: Alec, Daniel, William, and Stephen decide today to save for retirement. Each person wants to retire…

Q: You MUST use the TI BA II calculator features (N, I/Y, PV, PMT, FV, AMORT) to solve questions…

A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: 5. A 65-year old retiree invested Php. 400 000.00 in a pension plan that earn 15% interest…

A: The given problem can be solved using PMT function in excel. PMT function computes payment amount…

Q: 1. Student graduates and is employed receiving an annual salary of $70,000. Student will receive a…

A: Hi, since there are multiple parts, I will answer the first part only. Please repost the question…

Q: A person joins a pension plan at age 40 (40th birthday). How much will s/he have to pay into the…

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

Q: AN EMPLOYEE IS ABOUT TO RECEIVE THE SUM OF P300.00 AT THE END OF EACH YEAR FOR 5 YEARS. ONE YEAR…

A: Annual receipt =P 300.00 Number of annual = 5 Years Annual interest rate = 6%

Q: Your employer contributes $50 a week to your retirement plan. Assume that you work for your employer…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Q: Employers put $300 toward a pension plan every month. If the account has an interest rate of 9%/a…

A: Monthly contribution (c) = $300 Monthly interest rate (r) = 0.0075 (i.e. 0.09 / 12) Monthly period…

Question

Choose the best retirement plan for the employee from among those presented below. Effective interest is 12.68% pa.
a. P1.4M now

b. P64,000/month for 2 years

c. P1.65M on the 18th month

d. P100,000/month for 1 year plus P400,000 after one year

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Analysis

VIEW

Step 2 Calculation of nominal interest rate

VIEW

Step 3 a. P1.4M now

VIEW

Step 4 b. P64,000/month for 2 years

VIEW

Step 5 c. P1.65M on the 18th month

VIEW

Step 6 d. P100,000/month for 1 year plus P400,000 after one year

VIEW

Step 7 Conclusion

VIEW

Step by step

Solved in 7 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
Present Value of an Annuity Ralph Benke wants to make 8 equal semiannual withdrawals of 8,000 from a fund that will earn interest at 11 % compounded semiannually. Required: How much would Ralph have to invest on: 1. January 1, 2019, if the first withdrawal is made on July 1, 2019 2. July 1, 2019, if the first withdrawal is made on July 1, 2019 3. January 1, 2019, if the first withdrawal is made on January 1, 2022
An employee and employer cost-share 401(k) plan contributions, health insurance premium payments, and charitable donations. The employer also provides annual vacation compensation equal to ten days of pay at a rate of $30 per hour, eight-hour work day. The employee makes a gross wage of $3,000 monthly. The employee decides to use five days of vacation during the current pay period. Employees cover 30% of the 401(k) plan contribution and 30% of the health insurance premium. The employee also donates 1% of gross pay to a charitable organization. A. What would be the employees total benefits responsibility if the total 401(k) contribution is $700 and the health insurance premium is $260? B. Include the journal entry representing the payroll benefits accumulation for the employer in the month of March, if the employer matches the employees charitable donation of 1%.
Assuming the employee makes 100k per year. 7% is the employees investment, 14% from the employer. 2-1 You start at 27 years old and retire at 60 (33 years ) Average APR of 7% *I need the highlighted question answered
How do I solve the following: An employee that has 35 years until retirement has a current salary of $30,000 per year. The employee's wages are expected to increase by 5% annually over the next 35 years. The employer has a defined benefit pension plan in which a worker’s annual pension benefit is equal to 2% of the employee's final year’s wage for each year of employment, multiplied by the number of years of employment. The employee's expected annual pension benefit is calculated as $115,836.32. The cmpany contributes to the pension plan each year for the next 35 years. Assume 10% actuarial rate of return, and 30 years of retirement life. At the employee's time of retirement, what does the accumulated amount in the employee's pension plan have to be in order to meet the employee's annual pension benefit each year in 30 years?
A retired employee accumulated an amount of P1.5 M on his retirement account. Instead of taking as cash, it was invested in a portfolio earning 6% compounded quarterly. If he plans to get his first pension after 2 years, how much would he receive quarterly if he made an agreement that it would last for 10 years upon his first quarterly pension.
Determine the present value of future contributions to a pension plan for a person aged 35, earning 30.000$ per year and expecting to retire at 65. The pension plan requires contributions of 5% of salary and the employee expects to receive average annual salary increases of 3%. Use an annual effective rate of interest of 7% and assume contributions are made at the end of each year.
Calculate the annual premium for the following policy. (Use Table 20.1.) (for females subtract 3 years from the table.) (Round your answer to the nearest cent.) **TABLE ATTACHED***** Amount of coverage (face value of policy) Age and sex of insured Type of insurance policy Annual premium $50,000 27 (F) 20-year endowment
Your employer contributes $500 per month, at the beginning of each month, to a retirement fund on your behalf. The contributions earn interest at a rate of 6% per year, compounded monthly. At the end of twenty years, what will be the balance of the fund? Group of answer choices $69,790 $232,175 $70,139 $220,713 $231,020
Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.4% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $86,000 at the end of 2018 and the company’s actuary projects her salary to be $260,000 at retirement. The actuary's discount rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:2. Estimate by the accumulated benefits approach the amount of Davenport’s annual retirement payments earned as of the end of 2018.3. What is the company’s accumulated benefit obligation at the end of 2018 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)4. If no estimates are changed in the…
Your employer contributes 50 a week to your retirement plan. Assume that you work for your employer for another sixteen years and that the applicable discount rate is 6.5 %,compounded weekly. Givn these assumptions, what is this employee benefit worth to you today? 24135.99 25852.63 24218.04 25920.55 21574.68