An investor earns 13.67 percent before tax and is subject to a 10 percent tax on such earnings. Calculate the investor's after-tax rate of return.

Round the answer to two decimals in percentage form.

2.3d) Sarah earns 8.09 percent on her investment for the year. However, inflation for the year is 3.18 percent. What is her real inflation-adjusted rate of return?

3.3e) Your retired client has accumulated investment and retirement assets totaling $3,197,000 and is happy with an after-tax lifestyle of $209,000 a year. He is going to spend this amount every year forever. Leaving aside issues of inflation, what should his after-tax current yield be to covers his cost of living?

4.4a) William North has just inherited $931,000 which he would like to use as part of his retirement nest egg. William would like to know just how much the $931,000 will be worth in 19 years, when he will reach age sixty-five, assuming the funds can be invested for the entire period at a 11.9 percent annual rate.

5.4b) Bob Stevens has just inherited $101,725 which he would like to use as part of his retirement nest egg. Bob would like to know just how much the $101,725 will be worth in 11 years, when he will reach age sixty-five, assuming the funds can be invested for the entire period at a 4.31 percent annual rate.

6.4c) William North has just inherited $339,000 which he would like to use as part of his retirement nest egg. William would like to know just how much $339,000 will be worth in 15 years, when he will reach age sixty, in case he decides to retire early, assuming the funds can be invested for the entire period at a 6.31 percent annual rate.

Round the answer to two decimal places.

7.4d) Now Rich knows that he will have 740,020 in his inheritance fund, when he will reach age sixty. He would like to know how much he could withdraw from the fund in equal installments at the end of each year from the year he reaches age 60 until he reaches age 70, the year he must start withdrawing funds from his individual retirement account (IRA). Rich assumes the funds will continue to earn at a 13.52 percent annual rate. In other words, Rich would like to know the annual year-end payment from an eleven-year annuity (from age 60 to the year he will be 70), earning 13.52 percent annually on a principal sum of $740,020.

Round the answer to two decimal places.

8.4e) Sam has just inherited $269,000 which he would like to use as part of his retirement nest egg. Sam has decided that he wants to retire 8 years from now at age sixty. He would like to know how much of his other funds need be set aside at the age of 60, with his $269,000 inheritance in order to reach his goal of a $74,000 annuity from age sixty for 11 years (until the year he reaches age 70). Sam assumes the funds can continue to earn at a 5.9 percent annual rate compounded annually.

Calculate the answer to two decimal places.

9.5a) Assume that the current annual costs for your client's choice of college for this son are $50,000. Your client's son is now 13 years old and assuming he will be age 18 when beginning college. The college cost inflation rate is 4.7 percent compounded annually. Estimate first-year cost of college after adjustment for inflation.

Round the answer to two decimal places.

10.5b) You need to accumulate $107,161 for your son's education. You have decided to place equal year-end deposits in a savings account for the next 13 years. The savings account pays 14.49 percent per year, compounded annually. How much will each annual payment be?

Round the answer to two decimal places.

11.5c) Charles estimated a minimum need of $238,000 for college education fund for his son in 16 years when his son will start college. Assume that after-tax rate of return that Charles is able to earn from his investment is 6.03 percent compounded annually. Charles has already earmarked $21,802 for his son education. He understands that this amount is not enough to finance his son education. He is going to invest additional amounts each year at the beginning of the year until his son starts college. Compute the annual beginning of-the-year payment that is necessary to fund the current deficit. (Please use annual compounding, not simplifying average calculations).

12.5d) Simplified College Cost Worksheet

Calculate approximate monthly amount to invest at the beginning of the period. Round the final answer to two decimals. Please note that intermediate steps should be calculated to at least 4 decimals to get the answer correctly.

Assume the following information for your client

Step
1	Child's AGE	4
2	Years to college	18-(Step 1)
3	Annual College Costs (current dollars)	$46,181
4	Assumed College Inflation rate	3.9%
5	College Inflation Factor. Calculate as (1+Step 4)^(Step 2)	(1+Step 4)^(Step 2)
6	Estimate Future Annual Costs Calculate as	(Step 3* Step 5) or use FV formula in Excel or financial calculator
7	Estimated Total Future Costs (Step 6*) years in college 4	Step 6*years in college
	Funding requirements
8	Assumed after-tax return	8.7%
9	PV Factor	1/(1+Step 8)^Step 2
10	Total Lump-Sum Investment Currently Required	Step 7*Step 9 or use PV formula in Excel or financial calculator
11	Amount already earmarked for education	$21,910
12	Additional Limp-Sum funding required	Step 10-Step 11
13	Years of funding	4
14	PVIFA Due	Move to Step 15 to use Excel or financial calculator
15	Annual target amount to invest	(Step 12*Step 14) or use formula PMT in Excel or financial calculator
16	Approximate monthly amount to invest	(Step 15)/12 months

13.5e) Nancy's son plans to start college when he graduates from High School. Assume that after-tax annual rate of return that Nancy is able to earn from her investment is 12.08 percent. The rate of inflation of college costs is 4.25 percent. What is the real inflation-adjusted rate of return of Nancy's investment in college funds?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box).

14.6a) Thomas Green is using net present value (NPV) when evaluating investment opportunities. His required rate of return is 6.37 percent. The investment will produce the same after-tax cash inflows of $594,316 per year at the end of the year for 12 years. What is the NPV of a investment opportunity if the initial cost is $2,032,353?

Round the answer to two decimal places.

15.6b) Assume an individual makes a lump sum investment at the beginning of year one of $12,622, the present value of which is $12,622. The investor's discount rate, for an alternative safe investment, is 12.38 percent after tax. The expected return on this investment (received at each year-end) is as follows.

Year 1: 1,130

Year 2: 12,442

Year 3: 16,801

Year 4: 9,864

Year 5: 6,224

What is the net present value of the investment under consideration?

Round the answer to two decimal places.

16.6c) Assume an individual makes a lump sum investment at the beginning of year one of $468,900. The expected return on this investment (received at each year-end) is as follows.

Year 1: 176,300

Year 2: 100,000

Year 3: 128,300

Year 4: 123,700

What is the IRR of the investment under consideration?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

You should use Excel or financial calculator.

17.6d) Year 1 Initial investment of $50,000 Year 2 Inflow of $12,300 Year 3 Inflow of $7,500 Year 4 Additional investment of $5,000 Year 5 Inflow of $8,900 Year 6 Inflow of $12,600 Year 7 Inflow of 11,900 Year 8 Inflow of $21,050 Year 9 Inflow of $11,750 Year 10 Sale proceeds of $24,000

What is the internal rate of return (IRR) that this investment offers if all cash flows occur at the end of each period?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

You should use Excel or financial calculator.

18.6e) Find the modified internal rate of return (MIRR) for your client for the following series of future cash flows if your client is able to reinvest cash flows received from the investment at an annual rate of 8.50 percent. The initial investment at the beginning of the first year is $428,600.

Year 1: $170,200

Year 2: $176,100

Year 3: $139,200

Year 4: $171,000

Year 5: $139,500

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)