Question
Use the following to answer questions 28 29 (round to nearest whole dollar) The four actors below have just signed a contract to star in
Use the following to answer questions 28 29 (round to nearest whole dollar)
The four actors below have just signed a contract to star in a comedy. Each person signs independent contracts with
the following terms:
Contract amount:
How contract is paid
Actor 1
$1,000,000
Lump sum in 4 years
Actor 2
1,050,000
Lump sum in 5 years
Actor 3
350,000
Every year for 3 years
Actor 4
262,500
Every year for 4 years
Assume an annual discount rate of
5%
(
compounded annually
28. $_________What is the value of the lowest value contract today (round to nearest dollar)?
29. $_________What is the value of the highest paid contract today (round to nearest dollar)?
30. $_____________You would like to start saving for retirement. Assuming you are now 22 years old and you want to retire at age 60 , you have 38 years to watch your investment grow. You decide to invest in the stock market, which you expect it to earn about 6% per year into the future. You decide to invest $600 at the end of each month for the next 38 years (456 months). Calculate your accumulated investment at the end of 38 years. Round to nearest whole dollar.
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