Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After the last financial crisis, a company is obligated to make additional quarterly payments to an unfunded pension fund during the next 3 years. The

After the last financial crisis, a company is obligated to make additional quarterly payments to an unfunded pension fund during the next 3 years. The future value of those payments is to be $922,000. Actuarial estimations project the fund to earn interest at the rate of 8 percent per year. Payments are made at the end of each quarter. (Use factor table in Appendix B for calculation)

Required 1: What is the present value of the additional payments to be made to the pension fund? $

Required 2: What is the amount of interest earned in the fourth period? $

Required 3: What is the total amount of contributed towards the pension fund at the beginning of period 8? $

Required 4: What is the total amount contributed towards the pension fund at the end of period 8 inmediately after the 8th payment was made? $ [

Required 5: Assume the company had a very profitable year and at the moment of making the 10th payment they decided to advance the remaining funds to achieve the total future value required by actuarial estimations. How much it must pay in dollars at the end of period 10 and make no payments at the end of periods 11 and 12? $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For School Administrators Tools For School

Authors: Ronald E. Everett, Donald R. Johnson, Bernard W. Madden

3rd Edition

1610487710, 978-1610487719

More Books

Students also viewed these Accounting questions