Answer:
$65,742.60
Explanation:
Note: The full question is <em>"Peter wishes to create a retirement fund from which he can draw $20,000 when he retires and the same amount at each anniversary of his retirement for 10 years. He plans to retire 20 years from now. What investment need he make today if he can get a return of 5% per year, com- pounded annually?"</em>
At first, we need to find the PV of withdrawals and there are 11 withdrawals starting 20 years from now.
PV = PMT/r * 1 - 1/(1+r)^n. This formula gives the PV one period before the first withdrawal. That is 19 years from now because the first withdrawal is 20 years from now.
PMT = 20,000, n = 11,
r = 0.05
PV19 = 20,000/0.05 * [1 - 1/(1+0.05)^11]
PV19 = 400,000 * 0.4153207109
PV19 = 166,128.28436
Now, we need to discount this back to toda
PV0 = PV19/(1 + r)^n; n = 19, r = 0.05
PV0 = 166,128.28436/(1 + 0.05)^1
PV0 = $65,742.6033421702
PV0 = $65,742.60
So, Peter needs to make $65,742.60 today.
Answer: It will take Nico approximately 12 years
Explanation:
Payments = $40000
r = 12%
Future Value = 1000 000
Future Value annuity = Payments((1 + r)^n - 1)/r
1000000 = 40000((1 + 0.12)^n - 1)/0.12
40000((1.12)^n - 1) = 1000000 x 0.12
(1.12)^n -1 = 120000/40000
(1.12)^n = 3 + 1
nlog(1.12) = log(4)
n = log(1.12)/log(4) = 12.232510748
n ≈ 12 years
It will take Nico approximately 12 years
<u>Answer:Option C </u>Paid-In Capital in Excess of Par will be credited for $66,000
<u>Explanation:</u>
Given
No of shares 1,500
Par value $6
Common stock $75,000
Par value of stock = No of shares x Par value
=1500 x 6
=9,000
Excess paid in capital = Common stock - Par value
=75000-9000
=$66,000
So the Paid in capital which is excess of par value will be credited. It can also be termed as the market value of the shares. Par value will be mentioned in the share document. When there is additional paid in capital it is a credit balance in company accounts.
Answer:
An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase. A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease.
