(Solution) If You Deposit \$ 15,000 Today N A Certificate Of Deposit Andearn 1% Annual Interest, How Much Will You Have In 8 Years Melanie Will Receive A... | Snapessays.com

(Solution) If you deposit \$ 15,000 today n a Certificate of Deposit andearn 1% annual interest, how much will you have in 8 years Melanie will receive a...

If you deposit \$ 15,000 today n a Certificate of Deposit andearn 1% annual interest, how much will you have in 8 yearsMelanie will receive a graduation gift of \$7,000 from her parents in 4 years. If the discount rate is 3%, what is the gift worth today?3a. June received a life insurance payout from her grandmother in the form of an annuity. She will get \$15,000 per year for the next 30 years. How much is that worth today if the current long term interest rate is 2.2%? This is an ordinary annuity. Point value 3.0%3b. If Interest rates rise to 6%, what will be the value today of the annuity in 3a? Point value 5.0%4a. Vinod deposits \$3,000 into an IRA account that invests in long term U S Treasury Bonds. Current Interest rates for the 20 year bond are 2.25%. How long will it take to double Vinod's money?4b. How long will it take Vinod to triple his money at 2.25%?5a. The Woods have \$50,000 to use as a down-payment on a house, and they want to borrow \$250,000 to buy a house for \$300,000. The current annual mortgage interest rate is 3%. What will their monthly payment be for a 30 year loan that has equal monthly payments. They will owe zero at the end of the mortgage.5b. Mrs. Woods sees an advertisement for a 15 year loan at a rate of 2.5%. What would be the mortgage payment if they borrow \$250,000 at this lower interest rate?6.    Kim paid \$400 per month into her 401K retirement plan. After 30 years, she had accumulated \$500,000. What average annual rate of interest had he earned over the 30 years, assuming monthly compounding?7.    For the year that ended in January 2000, Wal-Mart had revenues of \$165 billion. For the year ended in January 2015, it had revenues of \$485 billion. What has been the average compound growth rate?8a. Bola has accumulated \$50,000 in her thrift savings plan at her job at the Federal Aviation Administration. The government puts in 1% of her pay and matches up to another 4% if she puts in 5% out of her pay. Bola earns \$90,000 a year and plans to add 5% from her income plus the agency 5% for a total of \$9,000 per year.Her cousin Eugene says that if she invests in stocks, she can earn 12% per year because that has been the long term history.   How much will she have in 25 years at retirement if she can earn 12% per year compounded annually?8b.          Bola's friend Marshall heard a speech by John C. (Jack) Bogle, founder of The Vanguard Group of Mutual Funds, one of the lowest cost and most successful group of funds. Jack said that with the increasing need to reduce carbon emissions, it is unlikely that long term stock returns can exceed 6% per year. Steps to reduce carbon will likely reduce prospects for economic growth in Mr. Bogle's opinion. How much will Bola have if Jack Bogle is correct and the earnings will be 6% per year compounded annually?9.      Christina hopes to open a Deli in 2015. The initial investment will be \$85,000. She expects that that the Deli will generate the positive cash flow as indicated below. If she can borrow          money at 7% per year, what will be the Net Present Value? Use 7% as the discount rate.10.          James and Corrine are considering what to do about purchasing a new car. They would like to buy a new 2016 Toyota Highlander. The dealer has quoted a price of \$35,000 with the options they want.They have three choices.Option 1:With a down payment of \$4,300, they can lease the car for 3 years at \$324 per month. At the end they have the option to purchase the car for \$25,000.If they decide to buy, they have two options.Option 2:They have the option of a zero-interest loan for 3 years.Option 3:They can deduct \$4,000 off the purchase price and finance the remaining balance with a 5-year loan with an interest rate of 6%.In all cases, the cost of sales tax and license tags total \$2,500. They plan to keep the car for 12 years. 10a.        Convert the 6% annual discount rate to a monthly rate and find the present Value of the lease option. The \$4,300 up-front fee includes the \$2,500 for tax and tags. 10b.       Calculate the Monthly Payment for the 3 year, zero interest loan for \$35,000. 10c.        create a cash flow time line for the purchase with a 3 year, zero Interest Loan. Don't forget the \$2,500 for tax and tags. 10d.       Calculate the Present Value of the purchase of the car with the zero interest loan with the monthly equivalent of the 6% discount rate 10e.       Calculate the payment for a loan of \$31,000 at 6% interest for 5 years. The rebate of \$4,000 is used to reduce the amount of the loan. James and Corrine must still pay the \$2,500 for tax and tags in period zero 10f.        Create a cash flow time line for the purchase with a \$4,000 rebate, a 5 year loan of \$31,000 at 6% Interest.   Note: the loan value is the \$35,000 price minus the \$4,000 rebate. Don't forget the \$2,500 for tax and tags in period zero. 10g.        Calculate the Present Value of the purchase of the car with the \$4,000 rebate and a 6% loan. 10h.       what should James and Corrine do? Why? NOTE- Be sure to explain what you do in words. Also, tell what the answer means. In problems with both part a and part b, compare the tw

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