Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the most you should pay for an investment that will pay yon $1,000 a year forever if the required rate of return is

image text in transcribed

What is the most you should pay for an investment that will pay yon $1,000 a year forever if the required rate of return is 10%? You plan on retiring, at the end of forty years. You plan on making an equal deposit at the end of each year in an account earning 10%. You want to be accumulated enough money so that you can withdraw $500,000 at the end of each year for 25 years during retirement (the interest rate remains at 10%). How much do you need to deposit each year? When I retire in 30 years, I want to be able to endow a scholarship fund that pays DePaul $1,000,000 a year forever (starting the year after I retire). I want to set up a savings plan so that I save an amount each of the next 30 years (an annuity) to have enough for this endowment. If the interest rate is 10%, what amount must I save each year? What is the present value of the following cash flows if i = 10% Your broker offers you a real estate deal that will pay you rent of $4,000 this year and this amount will increase every year by 2%, if the discount rate is 12% what is the most you should pay for this investment? What is the present value of a perpetuity of $500 per year if the interest rate is 10%? Find the present value of the following cash flows at an interest rate of 8%. You plan on saving $5,000 a year for 40 years at which time you will retire. At the end of that year you want to take out equal installments over the next 20 years. If the interest rate is 10% what amount will you be able to withdraw every year

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

Step: 3

blur-text-image

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

Tidy Finance With R

Authors: Christoph Scheuch, Stefan Voigt, Patrick Weiss

1st Edition

1032389346, 978-1032389349

More Books

Students also viewed these Finance questions