2. Your grandfather placed $5,000 in a trust fund for you. In 12 years what will be the worth of the savings. If the estimated rate of return on the trust fund is 8%?+
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- Your parents placed $240,000 in a trust fund for you. In 15 years, what will be the worth of the savings. If the estimated rate of return on the trust fund is 10%?<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.You need $4,000 to buy a new baking oven for your business in 4 years. What value you must have now if the compounded annually return is 12%. Your parents placed $240,000 in a trust fund for you. In 15 years, what will be the worth of the savings. If the estimated rate of return on the trust fund is 10%?
- QUESTION 2 1. You need $30,000 to buy a new Air-Con for your house in 4 years. What value you must have now if the compounded annually return is 10%. 2. Your father placed $50,000 in a trust fund for you. In 12 years what will be the worth of the savings. If the estimated rate of return on the trust fund is 7%?(Use Calculator or Formula Approach) Your parents set up a trust fund for you 10 years ago that is now worth $19,671.51. If the fund earned 7% per year, how much did your parents invest?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)
- Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36 A car dealer offers payment of $525.32 per months for 60 months on a $30,000 car after making a $5000 down payment. What's the loan's APR? a. 10.4798% b. 9.5224% c. 1.9609% d. 0.7935%1.1 Your parents set up a trust fund for you 22 years ago that is now worth R47 866,34. If the fund earned 8% per year, how much did your parents invest? 1.2 Suppose you are offered an investment that will allow you to double your money in 9 years. You have R20 000 to invest. What is the implied rate of interest? 1.3 Suppose you have a 4-year-old son and you want to provide R55 000 in 16 years towards his college education. You currently have R5 000 to invest. What interest rate must you earn to have the R55 000 when you need it? 1.4 Suppose you want to buy a new house. You currently have R30 000 and you figure you need to have a 10% down payment plus an additional 5% of the loan amount in closing costs. If the type of house you want costs about R450 000 and you can earn 7.5% per year, how long will it be before you have enough money for the down payment and closing costs?You have just celebrated your birthday. Your uncle, has set up a trust fund for you, which will pay you Ghc150,000 when you turn 30 years. If the relevant discount rate is 9%, how much is this fund worth today?
- 2. If you decided to save the entire $20,000 from your lottery payment each year for the next 20 years at 3%, how much would you have saved up in your bank account?1.2) You just inherited a trust that will pay you $100,000 per year in perpetuity. However, the first payment will not occur for exactly four more years. Assume an 8 percent annual interest rate. a) Calculate the value of this trust.6. Your grandfather left an inheritance for you of $100,000. However you can only drawdown on the investment as follows:Years 1 – 3 $15,000 each yearYear 4 to 6 $10,000 each yearYear 7 $25,000Interest on the fund is 5%.a) What is the present worth of this inheritance?b) Due to high liquidity interest rate have dropped to 4%. What will be the impact on the present worth of this inheritance as a consequence of the market change?