1. Sara May wants $2,000,000 in the bank in 10 years when she retires. Assuming an 8%...
Question:
1.Sara May wants $2,000,000 in the bank in 10 years when she retires. Assuming an 8% interest rate that compounds quarterly, what amount will she need to deposit each quarter to reach her goal? Please Explain using Time Value Formulas, is it PV of Ordinary Annuity, PV Single Sum, FV Ordinary Annuity, FV Single Sum
2. Fatimah issued at $100,000, 5 year, 5% bond when the market rate of interest was 8%. Calculate the issue price of the bond.
3. Sara May invests $10,000 per year into a growth stock mutual fund earning 12% annually. Assuming she invests this amount for 30 years, how much will she have when she retires?
4. Gavin offers to give Lara $5,000 a year for the next three years, and $10,000 a year for years 4 and 5, if Lara promises to sign a 5-year employment contract. What is this bonus worth to Lara today, assuming an 8% interest rate?
Financial Management for Public Health and Not for Profit Organizations
ISBN: 978-0132805667
4th edition
Authors: Steven A. Finkler, Thad Calabrese