The Time Value of Money

Mary has been inaugurated for a university for almost 25 years and is now approaching solitude. She wants to discourse separebuke financial offsprings anteriorly her solitude and has asked you to acceleration her direct the situations adown. Her assignment to you is to prepare a 3-4 page repute, discourseing each of the subjoined offsprings partially. You are to demonstration all your calculations and prepare a specific exsituation for each offspring. Issue A: For the ultimate 19 years, Mary has been warrantying $500 in her savings statement , which has acquireed 5% per year, compounded annually and is expected to endure paying that quantity. Mary get form one past $500 warranty one year from today. If Mary closes the statement exact aftercited she forms the ultimate warranty, how considerable get this statement be treasure at that season? Issue B: Mary has been inaugurated at the university for 25 years, delay an fairifiable proceedings of labor. As a conclusion, the consultation wants to pay her delay a benefit to her solitude bundle. They are offering her $75,000 a year for 20 years, set-outing one year from her solitude bound and each year for 19 years aftercited that bound. Mary would elect a one-season reimbursement the day aftercited she retires. What would this quantity be if the expend attention rebuke is 7%? Issue C: Mary’s resuscitation is unexpectedly paid far by another develop, and Mary is asked to come in her situation for another three years. The consultation assumes the benefit should come the identical, but Mary knows the confer-upon treasure of her benefit get fluctuate. What would be the confer-upon treasure of her adequate annuity? Issue D: Mary wants to acceleration pay for her granddaughter Beth’s teaching. She has resolute to pay for half of the training costs at State University, which are now $11,000 per year. Training is expected to growth at a rebuke of 7% per year into the foreseeable forthcoming. Beth fair had her 12th birthday. Beth plans to set-out propaganda on her 18th birthday and achieve in indecent years. Mary get form a warranty today and endure making warrantys each year until Beth set-outs propaganda. The statement get acquire 4% attention, compounded annually. How considerable must Mary’s warrantys be each year in regulate to pay half of Beth’s training at the inception of each develop each year? The subjoined chapters from the textbook Foundations of Financial Management delay Season Treasure of Money Card, 5th: Sources of Short tidings Financing The Season Treasure of Money