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Can someone please help me with number 3 problems A & B!!!! On the advice of your broker ten years ago, you invested in a

Can someone please help me with number 3 problems A & B!!!!image text in transcribed

On the advice of your broker ten years ago, you invested in a $6 stock that is now selling for $30. At what rate has your capital grown? b.Your father is about to retire. His firm has given him the option of retiring with a lump sum of $50,000 or an annuity of $8,000 for ten years. Which is worth more now, if the discount rate is (1) 6%, (2) 18%? 2. Mr. Smith retires in exactly 20 years. At that time he desires to have accumulated enough money so that he can consume $100,000 per year for perpetuity starting at that time. He, furthermore, wishes to make equal payments to his account each perioD -- 20 payments in all. What should his yearly savings be to achieve these objectives, if the aftertax return available to him is 15%? 3. Mr. D. plans to retire exactly twenty years from now (t=0), and he would like to have accumulated, by retirement, enough money to enjoy a $100,000 per year retirement income beginning in year 21 and continuing in perpetuity thereafter. So far he has saved up $50.000. all in stocks (that is, at t=0 his pension account contains $50,000). a)What must his annual contributions be if he is to achieve his goal (assume he makes 20 payments)? On average he expects to earn 10% on his money. b)The stock market collapses. By the end of the day (it is still t=0)his accumulated wealth has fallen to $30.000. Assuming he still expects on average to earn 10%, how much must he now contribute (assume 20 equal payments)

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