Michaels friend, Taylor, wants to go to business school. While his father will share some of the
Question:
Michael’s friend, Taylor, wants to go to business school. While his father will share some of the expenses, Taylor still needs to put in the rest on his own. But Taylor has no money saved for it yet. According to his calculations, it will cost him $49,487 to complete the business program, including tuition, cost of living, and other expenses. He has decided to deposit $5,000 at the end of every year in a mutual fund, from which he expects to earn a fixed 6% rate of return. It will take approximately for Taylor to save enough money to go to business school.
Michael inherited an annuity worth $7,105.97 from his uncle. The annuity will pay him six equal payments of $1,400 at the end of each year. The annuity fund is offering a return of?
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta