Q.8: John Long Waite will receive $100,000 in 50 years. His friends are very jealous of him. If the funds are discounted back at a rate of 14 percent, what is the present value of his future "pot of gold"?
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![Q.8:
John Long Waite will receive $100,000 in 50 years. His
friends are very jealous of him. If the funds are discounted
back at a rate of 14 percent, what is the present value of his
future "pot of gold"?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8c04f39f-5653-4736-abee-8c9f258bcbd6%2Fa52ee463-cdab-41e4-9950-d7e240fecf19%2Fckm1h7d_processed.jpeg&w=3840&q=75)
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- John Longwaite will receive 100,000 in 50 years. His friends are very jealous of him. If the funds are discounted back at a rate of 14 percent, what is the percent , what is the present values of his future “pot of gold”?K A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 12% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made? a. What is today's value of the bequest? Today's value of the bequest is $. (Round to the nearest dollar) b. What is the value of the bequest immediately after the first payment is made? The value of the bequest immediately after the first payment is made is $. (Round to the nearest dollar)7. Mr. Cruz wishes his daughter to receive P1, 000, 000 ten years from now. What amount shouldhe invest now if it will earn 10 % compounded annually during the first 5 years and 12 %compounded semiannually during the next 5 years? 8. A person wishes to have P500, 000 in a certain fund at the end of 5 years. How much should theperson invest in a fund that will pay 8% compounded continuously? 9. A debt of P400, 000 with 10% compounded semi-annually is to be amortized by semi-annualpayments over the next 5 years and the first due in 6 months. Find the semi-annual payments. 10. What is the present worth of an annual payment of P5, 000 at the end of each year for 10 yearsat 10 % compounded annually with the first payment at the end of five years? 11. Mr. David plans a deposit of P20, 000 at the end of each month for 5 years at 12% compoundedmonthly. What is the amount that will be available in two years? 12. If money is worth 8% compounded quarterly, find the present value of 12 quarterly…
- A rich relative has bequeathed you a growing perpetuity. The first payment will occur in one year and will be $2,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 3% larger than the last payment. This pattern of payments will go on forever. If the interest rate is 10% per year, a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made? a. What is today's value of the bequest? Today's value of the bequest is $ (Round to the nearest dollar.) b. What is the value of the bequest immediately after the first payment is made? The value of the bequest immediately after the first payment is made is $ (Round to the nearest dollar.)Your rich uncle has offered you two living trust payouts for the rest of yourlife. The positive cash flows of each trust are shown below. If your personalMARR is 10% per year, which trust should you select? Note: At 10% per year interest, infinity occurs when N = 80 years.A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $3,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 5% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 15% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made?
- Perpetuity: Your grandfather is retiring at the end of next year. He would like to ensure that his heirs receive payments of $10,000 a year forever, starting when he retires. If he can earn 6.5 percent annually, how much does your grandfather need to invest to produce the desired cash flow? Please use Excel to solveA rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $5,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 5% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 9% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made?Consider the following independent situations. a. Mike Finley wishes to become a millionaire. His money market fund has a balance of $92,296 and has a guaranteed interest rate of 10%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000? b. Assume that Sally Williams desires to accumulate $1 million in 15 years using her money market fund balance of $182,696. At what interest rate must Sally’s investment compound annually?
- Paul Finley wishes to become a millionaire. His money market fund has a balance of $239,392 and has a guaranteed interest rate of 10%. How many years must Paul leave that balance in the fund in order to get his desired $1,000,000? Round answer to 0 decimal places, e.g. 45.)A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 11% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made? a. What is today's value of the bequest? Today's value of the bequest is $ (Round to the nearest dollar.)11. A man deposited P6,000 at a rate of 10% per annum. However, to add more fund, he deposits P500 per year that started one year after he deposited the P6,000. If he is withdrawing P1,500 per year for his expenses, for how long will the fund last and what will be the balance in the fund after the last withdrawal was made?