Answer:
$1,067,477.62
Explanation:
A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.
Formula for Present value of annuity is as follow
PV of annuity = P x [ ( 1- ( 1+ r )^-n ) / r ]
PV of annuity = $100,000 x [ ( 1- ( 1+ 8% )^-5 ) / 8% ]
PV of annuity = $1,067,477.62
According to my calculations, in order to be able to withdraw $100,000 from an annuity earning 8% at the end of each of the next 25 years, the amount you would need to deposit now would be $1,067,477.62.
Answer:
The correct anwer is zero coupon.
Explanation:
A zero coupon bond is one in which there is no periodic payment of interest during the life of the bond and is sold at a discount well below its nominal value. The holder receives a return that is generated through the gradual appreciation of the security and it is redeemed at a predefined date in the future.
Answer:
Lynn will receive $63,754 at the end of 8 years.
Explanation:
Future value is the sum of value of principal invested and compounded return received over the investment period.
Using following formula of future value to calculate the required interest rate.
FV = PV x ( 1 + r )^n
PV = Present value = $40,000
n = number of years = 8 years
r = Interest rate = 6%
FV = Future value = ?
FV = $40,000 x ( 1 + 6% )^8 = $63,754
Answer: business proposal
Explanation:
Business proposal shows the benefits of embarking on a particular project, the plans needed to execute the project, the breakdown of materials needed to achieve the aim of the project, time frame, and the budget or total cost breakdown to successfully complete the project.
In summary, business proposal is written in other to convince investors to invest in a particular project.
