please do requirement 2-4
2. You are considering partial retirement. To do so you need to use part of your savings to supplement your income for the next 8 years. Suppose you need an extra $15,000 per year. What lump sum do you have to invest now to supplement your income for 8 years? Assume that your required rate of return is a. 4%, compounded annually. b. 10%, compounded annually. C. 16%, compounded annually. . 3. You just won a lump sum of $8,000,000 in a state lottery. You have decided to invest the winnings and withdraw an equal amount each year for 10 years. How much can you withdraw each year and have a zero balance left at the end of 10 years if you invest at a. 6%, compounded annually? b. 12%, compounded annually? 4. An NHL hockey player is offered the choice of two 4-year salary contracts, contract X for $2.4 million and contract Y for $2.32 million: Contract X Contract Y $ 550,000 End of year 1 End of year 2 End of year 3 300,000 $ 400,000 700,000 420,000 650,000 Print Done Data Table Present Value of $1 Period 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 1 .9709 .9615 .9524 .9434 .9346 .9259 .9091 89298772 .8621 .8475 .8333 2 .9426 .9246 9070 .7182 .6944 3 .9151 .8890 .8638 .6086 5787 4 .8885 .8548 .5158 4823 .8227 .7835 5 .8626 .8219 .8900 8734 .8573 .8264 .7972 7695 7432 .8396 8163 17938 .7513 .7118 .6750 .6407 .7921.7629 7350 .6830 .6355 5921 .5523 -7473 7130 .6806 .6209.5674 5194 4761 .7050 .6663 .6302 .5645 .5066 4556 4104 .6651 .6227 .5835 5132 4523 .3996 3538 .6274 .5820 .5403 4665 .4039 3506 3050 .4371 4019 6 .8375 .7903 7 .8131 .7599 .7462 .7107 .6768 .3704 3349 .3139 2791 .2660 .2326 8 .7894 .7307 9 .7664 .7026 .6446 .5919 5439 .5002 .4241 .3606 .3075 2630 .2255 1938 10 .7441 .6756 6139 5584 .5083 .4632 .3855 .3220 .2697 2267 1911 1615 15 .6419 .5553 4810 .4173 .3624 .3152 2394 .1827 .1401 1079 .0835 .0649 lyc m 20 .5537 4564 .3769 .3118 .2584 2145 1486 1037 0728 0514 0365 0261 .0160 .0105 25 .4776 .3751 .2953 .2330 .1842 . 1460 .0923 .0588 0378 .0245 t 30 4120 .3083 .2314 .1741 .1314 .0994 .0573 .0334 .0196 0116 .0070 .0042 i Data Table - X Present Value of Ordinary Annuity of $1 Period 3% 4% 5% 6% 7% 8% 10% 12% 14% 16% 18% 20% 1 .9709 .9615 .9524 .9259 .9091 .8929 .8772 .8621 .8475 .8333 2 1.9135 1.8861 1.8594 .9434 .9346 1.8334 1.8080 2.6730 2.6243 1.7833 1.7355 1.6901 1.6467 1.6052 1.5656 1.5278 3 2.8286 2.7751 2.7232 2.5771 2.4869 2.4018 2.3216 2.2459 2.1743 2.1065 3.1699 3.0373 2.9137 2.7982 2.6901 2.5887 4 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 5 4.5797 4.4518 4.3295 4.2124 4.1002 3.9927 3.7908 3.6048 3.4331 3.2743 3.1272 2.9906 6 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.3553 4.1114 3.8887 3.6847 3.4976 3.3255 3.6046 7 6.2303 6.0021 5.7864 5.5824 5.3893 5.2064 4.8684 4.5638 4.2883 4.0386 3.8115 8 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 9 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.3349 4.9676 4.6389 4.3436 4.0776 3.8372 5.7590 5,3282 4.9464 4.6065 4.3030 4.0310 6.1446 5.6502 5.2161 4.8332 4.4941 4.1925 10 8.5302 8.1109 7.7217 6.7101 7.3601 7.0236 9.7122 9.1079 15 11.9379 11.1184 10.3797 8.5595 7.6061 6.8109 6.1422 5.5755 5.0916 4.6755 In 20 25 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 8.5136 7.4694 6.6231 5.9288 5.3527 4.8696 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.0770 7.8431 6.8729 6.0971 5.4669 4.9476 19.6004 17.2920 15.3725 13.7648 12.4090 11.2578 9.4269 8.0552 7.0027 6.1772 5.5168 4.9789 30
