Attached is my finance homework please check over my answers and let me know if they are correct. If they aren't please let me know the correct answer and how to get to the answer.

BUSI 320 Comprehensive Problem 3 FALL B

Use what you have learned about the time value of money to analyze each of the following decisions:

Decision #1: Which set of Cash Flows is worth more now?

Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive:

Option A: Receive a one-time gift of $ 9000 today.

Option B: Receive a $1300 gift each year for the next 10 years. The first $1300 would be

received 1 year from today.

Option C: Receive a one-time gift of $15,000 10 years from today.

Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $____9000.00______ today.

Option B would be worth $____11089.26______ today.

Option C would be worth $_____11161.41_____ today.

Financial theory supports choosing Option ___c____

Compute the Present Value of each of these options if you expect the interest rate to be 6% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $______9000.00___ today.

Option B would be worth $______9568.11___ today.

Option C would be worth $______8375.92____ today.

Financial theory supports choosing Option ____b___

Compute the Present Value of each of these options if you expect to be able to earn 9% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $______9000.00____ today.

Option B would be worth $______8342.96____ today.

Option C would be worth $____6336.16______ today.

Financial theory supports choosing Option ___a____

Decision #2 begins at the top of page 2!

Decision #2: Planning for Retirement

Tom and Tricia are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $2400 per year to prepare for retirement. Tricia just told Tom, though, that she had heard that they would actually have more money the day they retire if they put $2400 per year away for the next 10 years - and then simply let that money sit for the next 35 years without any additional payments ? then they would have MORE when they retired than if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Tom and Tricia make an informed decision:

Assume that all payments are made at the END a year (or month), and that the rate of return on all yearly investments will be 7.5% annually.

(Please do NOT ROUND when entering ?Rates? for any of the questions below)

1. How much money will Tom and Tricia have in 45 years if they do nothing for the next 10 years, then put $2400 per year away for the remaining 35 years?

$370,203.85

1. How much money will Tom and Tricia have in 10 years if they put $2400 per year away for the next 10 years?$33,953.01

b2) How much will the amount you just computed grow to if it remains invested for the remaining

35 years, but without any additional yearly deposits being made?

$426,750.98

1. How much money will Tom and Tricia have in 45 years if they put $2400 per year away for each of the next 45 years? $796,954.98
2. How much money will Tom and Tricia have in 45 years if they put away $200 per MONTH at the end of each month for the next 45 years? (Remember to adjust 7.5% annual rate to a Rate per month!)

$893,406.19

1. If Tom and Tricia wait 25 years (after the kids are raised!) before they put anything away for retirement, how much will they have to put away at the end of each year for 20 years in order to have $800,000 saved up on the first day of their retirement 45 years from today? $18473.75

BUSI 320 Comprehensive Problem 3 FALL B Use what you have learned about the time value of money to analyze each of the following decisions: Decision #1: Which set of Cash Flows is worth more now? Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive: Option A: Receive a one-time gift of $ 9000 today. Option B: Receive a $1300 gift each year for the next 10 years. The first $1300 would be received 1 year from today. Option C: Receive a one-time gift of $15,000 10 years from today. Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose? Option A would be worth $____9000.00______ today. Option B would be worth $____11089.26______ today. Option C would be worth $_____11161.41_____ today. Financial theory supports choosing Option ___c____ Compute the Present Value of each of these options if you expect the interest rate to be 6% annually for the next 10 years. Which of these options does financial theory suggest you should choose? Option A would be worth $______9000.00___ today. Option B would be worth $______9568.11___ today. Option C would be worth $______8375.92____ today. Financial theory supports choosing Option ____b___ Compute the Present Value of each of these options if you expect to be able to earn 9% annually for the next 10 years. Which of these options does financial theory suggest you should choose? Option A would be worth $______9000.00____ today. Option B would be worth $______8342.96____ today. Option C would be worth $____6336.16______ today. Financial theory supports choosing Option ___a____ Decision #2 begins at the top of page 2! Decision #2: Planning for Retirement Tom and Tricia are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $2400 per year to prepare for retirement. Tricia just told Tom, though, that she had heard that they would actually have more money the day they retire if they put $2400 per year away for the next 10 years - and then simply let that money sit for the next 35 years without any additional payments - then they would have MORE when they retired than if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Tom and Tricia make an informed decision: Assume that all payments are made at the END a year (or month), and that the rate of return on all yearly investments will be 7.5% annually. (Please do NOT ROUND when entering \"Rates\" for any of the questions below) a) How much money will Tom and Tricia have in 45 years if they do nothing for the next 10 years, then put $2400 per year away for the remaining 35 years? $370,203.85 b) How much money will Tom and Tricia have in 10 years if they put $2400 per year away for the next 10 years? $33,953.01 b2) How much will the amount you just computed grow to if it remains invested for the remaining 35 years, but without any additional yearly deposits being made? $426,750.98 c) How much money will Tom and Tricia have in 45 years if they put $2400 per year away for each of the next 45 years? $796,954.98 d) How much money will Tom and Tricia have in 45 years if they put away $200 per MONTH at the end of each month for the next 45 years? (Remember to adjust 7.5% annual rate to a Rate per month!) $893,406.19 e) If Tom and Tricia wait 25 years (after the kids are raised!) before they put anything away for retirement, how much will they have to put away at the end of each year for 20 years in order to have $800,000 saved up on the first day of their retirement 45 years from today? $18473.75