Carrie grandfather owns a farm. The farm earned $750,000 this year. The profits are expected to grow at 4.5% per year forever. What the value of the farm if the discount rate is 14.75%? What is the expected selling price of the farm next year? How much did the farm appreciate (as a percent)? %
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- Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?Future value of an ordinary annuity: Robert Hobbes plans to invest $25,000 a year at the end of each year for the next seven years in an investment that will pay him a rate of return of 11.4 percent. How much money will Robert have at the end of seven years? Could you please show the formula that would be used if using excel is for either FV or however it is set up. ThanksYou purchase a home for $207,000 that you expect to appreciate 8% in value on an annual basis. How much will the home be worth in ten years? Factors to use for n=10, I =8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS)Future Value of $1 2.15892 Future Value of an Annuity of $1 14.48656Present Value of $1 0.46319Present Value of an Annuity of $1 6.71008
- What’s the rate of return you would earn if you paid $1,500 for a perpetuity that pays $105 per year?A man can sell his business for $800,000 cash or for $125,000 plus $12'I a. Find the present value of the annuity that is offered if money is worth 10%; compounded annually. b. If he takes the $800,000, spends $125,000 of it, and invests the rest in a 9-year annuity at 10%, compounded annually, what size annuity payment will he receive at the end of each year? c. Which is better, taking the $125,000 and the annuity or taking the cash settlement? a. Find the present value of the annuity that is offered if money is worth 10%, compounded annually. (Type an integer or decimal rounded to the nearest cent as needed.)Future value of an ordinary annuity: Cecelia Thomas is a sales executive at a Baltimore firm. She is 25 years old and plans to invest $3,000 every year in an IRA account, beginning at the end of this year until she reaches the age of 65. If the IRA investment will earn 9.75 percent annually, how much will she have in 40 years, when she turns 65? Please use Excel to solve
- 2. Your aunt invested in a variable insurance product of universal bank. If her annual premium is P40 000 for 10 years, what single amount should your aunt invest today instead of an annuity? How much will be paid out to your aunt after 10 years? Assume that the interest rate is 4% compounded monthly.Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $160,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? O 2.28% O 2.20% O 2.22% 2.33% 2.59%After retirement, you expect to live for 25 years. You would like to have $91,000 in income each year. How much should you have saved in your retirement account to receive this income if the annual interest rate is 9 percent per year? (Assume that the payments start one year after your retirement) Multiple Choice $1,472.33173 $893,85474 $2,275,000.00 $101,089.74
- An aunt gifts you with $12,000, but only after you invest it for one year. She givesyou two choices.1. Invest the entire sum at 4.2% compounded monthly.2. Invest $1000 at 7.1% each month in an annuity that pays every month.(a) What is the future value of the money invested with method 1?(b) How much interest is earned with method 1?(c) What is the future value of the money invested with method 2?(d) How much interest is earned with method 2?(e) Which method would you choose?4. A couple decides to invest some money in an account for use during retirement. Their goal is to have $100,000 in 40 years. The account pays 5.5% compounded monthly. A. How much do they need to invest to meet their goal? B. How much interest will they earn? C. What is the annual percentage yield? D. Prepare a table that shows the growth of the investment.. Your friend Anne is planning to invest $700 each year for four years and will earn a rate of 6 percent per year. Determine the future value of this annuity due if her first $700 is invested now. Show your work. What is the difference between an annuity due and an ordinary annuity? Explain.