You just received an insurance settlement offer related to an accident you had six years ago. The offer gives you a choice of one of the following three offers:
You can earn 7.5 percent on your investments. You do not care if you personally receive the funds or if they are paid to your heirs should you die within the settlement period. Which one of the following statements is correct given this information?
Option A has a present value of $90,514.16 at 7.5 percent. Option B has a present value of $85,255.68 at 7.5 percent. Option C has a present value of $100,000. Option C is the best choice since it has the largest present value. |
51.
|
Samuelson Engines wants to save $750,000 to buy some new equipment four years from now. The plan is to set aside an equal amount of money on the first day of each quarter starting today. The firm can earn 4.75 percent on its savings. How much does the firm have to save each quarter to achieve its goal?
|
52.
|
Stephanie is going to contribute $300 on the first of each month, starting today, to her retirement account. Her employer will provide a 50 percent match. In other words, her employer will contribute 50 percent of the amount Stephanie saves. If both Stephanie and her employer continue to do this and she can earn a monthly rate of 0.90 percent, how much will she have in her retirement account 35 years from now?
|
No comments:
Post a Comment