) Jackie just turned 16 and wants to buy a car—now! Problem is, she has no money. She does have a $6000 inheritance that she can cash in in two years, when she turns 18. She wants to borrow against that inheritance from her dad and offers to pay the entire loan back in a single payment when she turns 18. Her dad agrees to lend her the present

) Jackie just turned 16 and wants to buy a car—now! Problem is, she has no money. She does have a $6000 inheritance that she can cash in in two years, when she turns 18. She wants to borrow against that inheritance from her dad and offers to pay the entire loan back in a single payment when she turns 18. Her dad agrees to lend her the present

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 44P: LO.3, 4 Jabari Johnson is considering acquiring an automobile at the beginning of 2020 that he will...

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Jackie just turned 16 and wants to buy a car—now! Problem is, she has no money. She does have a $6000 inheritance that she can cash in in two years, when she turns 18. She wants to borrow against that inheritance from her dad and offers to pay the entire loan back in a single payment when she turns 18. Her dad agrees to lend her the present value of the $6000 that she will pay back in two years, and he will charge a token interest rate of 1.5% a year compounded yearly. How much should dad spot Jackie to buy the car?
Patricia finances a $49,100 car with annual payments at a 3.10% interest rate over 8 years, at which time the car will have zero value. If she wants to sell the car in 2 years, how much does she need to sell the car for to break even? a.$6,955 b.$42,145 c.$5,655 d.$51,838 e.$37,925
RT is about to loan his granddaughter Cynthia $20,000 for 1 year. RT’s TVOM, based upon his current investment earnings, is 12%, and he has no desire to loan money for a lower rate. Cynthia is currently earning 8% on her investments, but they are not easily available to her, and she is willing to pay up to $2,000 interest for the 1-year loan. Solve, a. Should they be able to successfully negotiate the terms of this loan? b. If so, what range of pay backs would be mutually satisfactory? If not, how many dollars off is each person from reaching an agreement?
Your daughter is born today and you want her to be a millionaire by the time she is 35 years old. You open an investment account that promises to pay 12% per year. How much money must you deposit each year, starting on her 1st birthday and ending on her 35th birthday, so your daughter will have $1,000,000 by her 35th birthday? a. $2,317 b.$3,455 c.$5,777 d.$9,450 e.None of these solutions is correct
A man decided to save to buy a new $30,000 car to take care of his family in his hometown.He has $12,000 today that can be invested at UBA bank . A. If the bank pays 6% interest compounded annually,how long would it take him before he has enough money to buy the car ? B.if he wants to visit his family in 4 years time at what annual rate should he invest the money to have enough to buy the car ?
1. Mr. Lima borrowed ₱50,000 from a lending firm to start a mini-store business. If the firm charges simple interest of 5%, how much must Mr. Reyes pay in three years? 2. At what simple interest rate must ₱100,000 be invested so as to gain an interest of ₱10,000 after 5 years? 3. In preparation for Sandara’s college education, her parents want to save ₱400,000 after 12 years. How much should they deposit in a bank providing an interest rate of 2% compounded quarterly? 4. How long should ₱50,000 be invested at 6% compounded semi-annually if it should earn an interest of ₱10,000? 5. A cellular phone may be purchased at ₱1,500 payable monthly for 18 months. The first payment is due after 3 months. How much is the cellular phone if the interest rate is 12% convertible monthly? 6. Warlo bought a laptop that is payable by monthly installment of ₱1,800 for 12 months starting at the end of 2 months. How much is the cash value of the laptop if interest is at 10% convertible monthly? 7.…
Jino sold his house. In addition to cash, he took a mortgage on the house. The mortgage will be paid off by monthly payments of P12, 345 for 10 years. He decided to sell the mortgage to a local bank. The bank will buy the mortgage, but requires a 1% per month interest rate on their investment. How much will the bank pay for the mortgage?
You have just graduated, are dead broke, but would still like to buy a new car so that you can show it off on Instagram. Your rich Aunt Amy, who is a retired investment banker at the age of 35 because she knew better, is willing to lend you the money to buy the car, as long as you promise to pay her back in four years. You propose to pay her the rate of interest she would otherwise get by putting the money in the bank, which has deposit and loan rates of 2% and 6%, respectively. Based on your projected income and living expenses, you anticipate that you will be able to pay her $30,000, $40,000, $45,000, and $50,000 at the end of each of the next four years, respectively. (a) If your aunt accepted your proposal, how much would she be willing to lend you today? (b) How much would your aunt have in four (4) years if she chooses not to lend you the money? (c) How much would your aunt have in four (4) years if she chooses to lend you the money? (d) Based on your calculations in…
You have just graduated, are dead broke, but would still like to buy a new car so that you can show it off on Instagram. Your rich Aunt Amy, who is a retired investment banker at the age of 35 because she knew better, is willing to lend you the money to buy the car, as long as you promise to pay her back in four years. You propose to pay her the rate of interest she would otherwise get by putting the money in the bank, which has deposit and loan rates of 2% and 6%, respectively. Based on your projected income and living expenses, you anticipate that you will be able to pay her $30,000, $40,000, $45,000, and $50,000 at the end of each of the next four years, respectively. Required: (a) If your aunt accepted your proposal, how much would she be willing to lend you today? (b) How much would your aunt have in four (4) years if she chooses not to lend you the money? (c) How much would your aunt have in four (4) years if she chooses to lend you the money? (d) Based on your calculations in…
To capitalize on all the money he earned as a teenager, Justin has $500,000 that he wants to invest into an account a.) How much money does Justin have after 10 years if the account earns 5% interest compounded continuously? b.) How long will it take for Justin's money to grow to 2,000,000?
Tori is planning to buy a car. The maximum payment she can make is $3400 per year, and she can get a car loan at her credit union for 7.3% interest. Assume her payments will be made at the end of each year 1–4. If Tori’s old car can be traded in for $3325, which is her down payment, what is the most expensive car she can purchase?
(A) Suppose Mr. Ali, a manager in a financial firm, has just won a lottery of worth $ 10,000 and is planning to retire thirty years from today. He expects that he may need $ 45,000 on the marriage of his daughter 20 years from today, $ 15,000 to exchange his old car with the new one 15 years from today and $ 150,000 to purchase a house exactly at the retirement age. He determines that he needs $20,000 per year once he retires, with the first retirement funds withdrawn one year from the day he retires. He estimates that he will earn 9 % per year on the retirement funds and that he will need funds up to and including his 20th birthday after retirement. i. How much he needs to deposit in an account today so that he has enough funds to meet all his future expenditures? ii. How much he needs to deposit each year in an account, starting one year from today upto his retirement age, so that he may have enough funds to meet all his future requirements? (B) Suppose that an investment promises to…