(1) You wish to retire in 10 years, at which time you want tohave accumulated enough money to receive an annual annuity of$13,000 for 15 years after retirement. During the period beforeretirement you can earn 9 percent annually, while after retirementyou can earn 11 percent on your money.
What annual contributions to the retirement fund will allow you toreceive the $13,000 annuity? Use Appendix C and Appendix D for anapproximate answer, but calculate your final answer using theformula and financial calculator methods. (Do not roundintermediate calculations. Round your final answer to 2 decimalplaces.)
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Annual contribution=
(2) Mr. Dow bought 100 shares of stock at $17 per share. Threeyears later, he sold the stock for $23 per share. What is hisannual rate of return? Use Appendix B for an approximate answer,but calculate your final answer using the financial calculatormethod. (Do not round intermediate calculations. Round yourfinal answer to 2 decimal places.)
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Annual rate of return % =
(3) Franklin Templeton has just invested $9,760for his son (age one). This money will be used for his son’seducation 19 years from now. He calculates that he will need$35,235 by the time the boy goes to school.
What rate of return will Mr. Templeton need in order to achievethis goal? Use Appendix B for an approximate answer, but calculateyour final answer using the formula and financial calculatormethods. (Do not round intermediate calculations. Roundyour final answer to 2 decimal places.)
Rate of Return% =
(4) Juan Garza invested $103,000 5 years ago at8 percent, compounded quarterly. How much has he accumulated? UseAppendix A for an approximate answer but calculate your finalanswer using the formula and financial calculator methods.(Do not round intermediate calculations. Round your finalanswer to 2 decimal places.)
Future Value =
(5) Jack Hammer invests in a stock that will pay dividends of$3.15 at the end of the first year; $3.60 at the end of the secondyear; and $4.05 at the end of the third year. Also, he believesthat at the end of the third year he will be able to sell the stockfor $65.What is the present value of all future benefits if adiscount rate of 8 percent is applied? Use Appendix B for anapproximate answer, but calculate your final answer using theformula and financial calculator methods.
Dividend Present Value
$3.15
3.60
4.05
65.00
Total
(6) Rita Gonzales won the $44 million lottery.She is to receive $2 million a year for the next 17 years plus anadditional lump sum payment of $10 million after 17 years. Thediscount rate is 9 percent.
What is the current value of her winnings? Use Appendix B andAppendix D for an approximate answer, but calculate your finalanswer using the formula and financial calculatormethods.(Do not round intermediate calculations. Round yourfinal answer to 2 decimal places.)
Present Value =Â Â
