er and draw the cash flow diagram A man invests P 20,000 now for college education of his 2 year old son. If the fund earns 10% effective, how much will the son get each year starting from his 18th to 22nd birthday.
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A man invests P 20,000 now for college education of his 2 year old son. If the fund earns 10% effective, how much will the son get each year starting from his 18th to 22nd birthday.
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- Determining the right amount of short-term, liquid investments. Ella and Aaron Martin together earn approximately 92,000 a year after taxes. Through an inheritance and some wise investing, they also have an investment portfolio with a value of almost 200,000. a. How much of their annual income do you recommend the Martins hold in some form of liquid savings as reserves? Explain. b. How much of their investment portfolio do you recommend they hold in savings and other short-term investment vehicles? Explain. c. How much, in total, should they hold in short-term liquid assets?Comprehensive The following are three independent situations: 1. K. Herrmann has decided to set up a scholarship fund for students. She is willing to deposit 5,000 in a trust fund at the end of each year for 10 years. She wants the trust fund to then pay annual scholarships at the end of each year for 30 years. 2. Charles Jordy is planning to save for his retirement. He has decided that he can save 3,000 at the end of each year for the next 10 years, 5,000 at the end of each year for Years 11 through 20, and 10,000 at the end of each year for Years 21 through 30. 3. Patricia Karpas has 200,000 in savings on the day she retires. She intends to spend 2,000 per month traveling around the world for the next 2 years, during which time her savings will earn 18%, compounded monthly. For the next 5 years, she intends to spend 6,000 every 6 months, during which time her savings will earn 12%, compounded semiannually. For the rest of her life expectancy of 15 years, she wants an annuity to cover her living costs. During this period, her savings will earn 10% compounded annually. Assume that all payments occur at the end of each period. Required: 1. In Situation 1, how much will the annual scholarships be if the fund can earn 6%? How much at 10%? 2. In Situation 2, (a) How much will Charles have at the end of 30 years if his savings can earn 10%? How much at 6%? (b) If Charles expects to live for 20 years in retirement, how much can he withdraw from his savings at the end of each year if his savings earn 10%? How much at 6%? (c) How much would Charles need to invest today to have the same amount available at the time he retires as calculated in Situation 2(a) at 10%? How much at 6%? 3. In Situation 3, how much will Patricias annuity be?DETERMINING THE RIGHT AM OUNT OF SHORT-TERM, LIQUID INVESTM ENTS. Leo and Ava Bryant together earn approximately 92,000 a year after taxes. Through an inheritance and some wise investing, they also have an investment portfolio with a value of almost 200,000. a. How much of their annual income do you recommend the Bryants hold in some form of liquid savings as reserves? Explain. b. How much of their investment portfolio do you recommend they hold in savings and other short-term investment vehicles? Explain. c. How much, in total, should they hold in short-term liquid assets?
- Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264A man invested P60,000 now for the college education of his 2-year old son. If the fund earns 14% effective, how much will the son get each year starting from his 17th to the 21st birthday?With cashflow diagram pleaseA civil engineer starts investing his money when he graduates from college. He is able to afford investing $10,000 a year from the time he graduates in four years until the end of eight years. He also plans to increase his investment an additional $2,500 per year increasing by $2,500 every year until year eight. Use the interest rate 10%. a. draw the cash flow diagrams for the above cash flows b. how much will the civil engineer have saved by the end of year eight c. what is its present worth on the year he started college
- Marsiah Crunch plans to deposit cash in her saving account each year as shown below. Her saving effort would be useful as preparation for her son’s education. Year Deposit (RM) 0 1000 1 2000 2 2000 3 2000 4 3000 5 3000 6 3000 (a) Draw a cash flow diagram. (b) Estimate the future worth (FW) at the end of the 10th year based on the investment rate of 8% per annum.Finance Q)Mohammed estimate that he will need RO 10,000 in 5 years to fund his university education. How much should he invest in a trust fund that pays an interest rate of 5% pa compounded quarterly?4. A young man has decided to go into the business at the age of 25, he deposits a certain amount and will increase the deposit by 50,000 each year until the age of 35 to reach 30M on that age. If the fund can be invested at 15% compounded annually, how much should his initial investment be? DRAW THE CASH FLOW DIAGRAM
- Jack Walter recognizes the value of saving part of his income. He has set a goal to have $30,000 in cash available for emergencies. How much should he invest semiannually to have $30,000 in five years if the sinking fund he has selected pays 6% annually, compounded semiannually?Answer and draw neatly the necessary cash flow diagrams, and box your final answers. A young woman, 22 years old, has just graduated from college. She accepts a good job and desires to establish her own retirement fund. At the end of each year thereafter she plans to deposit P2,000 in a fund at 15% annual interest. How old will she be when the fund has an accumulated value of P1,000,000?A man invested P50,000 now for the college education of his 2-year old son. If the fund earns 14% effective, how much will the son get each year starting from his 17th to the 21st birthday? show step by step.
