Finance Chap 1 and 2

,Sarah L. GJanuary 6, 2013 Written Assignment #1 1. A) $1,000 with 5% beguile by and by 10 socio-economic classs gives you $1,628. Therefore, you would assimilate $628 in kindle. B) If the interest is move choke off severally form, a agree of $500 would be gain because the $1,000 investment would earn $50 of unprejudiced interest severally form. C) The answers are different because if the interest is left untouched, it makes the principal spirit total higher to each one category, giving much specie after(prenominal) 10 years. Compounded interest allows for more money that impartial interest would. 2. A) If the individual retires at the mature of 65, having started the program at age 40, there would be $219,318 in the handbill. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If the rescuer defers retirement until age 70 and continues contributions, there would be $120,531 left. $3,000 x (8% in 30 years) 3,000 x 113.283 = 339,849 219,318 = $120,531 more C) There would be $102,860 more if the saver discontinues the contributions at age 65 but does non retire til age 70. $219,318 x (8% in 5 years) $219,318 x 1.469 = 322,178.14 219,318.00 = $102,860.14 3. A) A 45 year old woman would build accumulated $102,320.24 in her news report if she retires at 65. $2,000 x (9% in 20 years) $2,000 x 51.

160 = $102,320 B) At retirement, she can withdraw $11,208 each year. $102,320 = x *(1-1.09^-20)/.09 x = $ 11,208 5. If a parent wants to save 100,000 in 18 years in an account that earns 9%, he would have to invest $2,421.24 annually. FV= PV of rente Due x (1.09)18; $100,000 = PV of annuity Due x (1.09)18; PV of rente = 100.000/(1.09)18; PV of Annuity = $21,199.37 PV of Annuity = salary x [1.(1.09)-18] /0.09; $21,199.37 = fee x 8.7556; Payment = $21,199.37/8.7556; Payment = $2,421.24 6. If a widow has $93,000 investment gentle 9% annually, she can non withdraw $16,000 a year for the next 10 years. PV = Payment x [1-(1.09)-10]/0.09; Pmnt =...If you want to buzz off in a affluent essay, order it on our website: Orderessay

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