Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mr. Frodo Saquet wants to set up a pension fund. He decides to deposit $ 9,000 on each anniversary date, starting at his 34 anniversary

image text in transcribed
Mr. Frodo Saquet wants to set up a pension fund. He decides to deposit $ 9,000 on each anniversary date, starting at his 34 anniversary which he will celebrate in exactly one year, and for 26 years. Mr. Frodo wants to be able to withdraw a monthly pension the month after his 60 in birthday and this, inclusive until his 80 anniversary. As a good trader, he hopes to invest his funds at the rate of 12% capitalized monthly for the duration of the investment Work to do: a) Draw the time diagram representing the situation; b) How much will he have raised when he is 60. birthday, immediately after having completed his last deposit: c) What will be the monthly value of the annuity that Mr. Frodo will receive? d) How much should Mr. Frodo have deposited from the 34 n to 60 birthday to receive a pension monthly for $ 22,500 from the month after turning 60 to 80? e) Determine the amount of the monthly pension to which Mr. Frodo will be entitled, if he decides to invest $ 9,000 per year from the 34 in to 60 n birthday and the rate structure offered is as follows: 12.682503% to annual capitalization for the first ten (10) years from the 34th anniversary; 14% semi-annually funded for the following fifteen (15) years, and 1.5% monthly effective for the last years

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_2

Step: 3

blur-text-image_3

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

International Financial Management

Authors: Cheol Eun, Bruce Resnick

7th Edition

0077861604, 9780077861605

More Books

Students also viewed these Finance questions

Question

work settings of recent graduates;

Answered: 1 week ago

Question

Dont off er e-mail communication if you arent going to respond.

Answered: 1 week ago