Organizing and managing your financial resources

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$5.00 Organizing and managing your financial resources

From Business: Finance , Economics: Public-Finance
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Due on Oct. 12, 2008
Asked on Oct 12, 2008 at 5:50:49PM

Q:
A. Joe won a lottery jackpot that will pay him $12,000 each year for the next ten years. If the market interest rates are currently 12%, how much does the lottery have to invest today to pay out this prize to Joe over the next ten years?

B. Mary just deposited $33,000 in an account paying 10% interest. She plans to leave the money in this account for seven years. How much will she have in the account at the end of the seventh year?

C. Mary and Joe would like to save up $10,000 by the end of three years from now to buy new furniture for their home. They currently have $2500 in a savings account set aside for the furniture. They would like to make equal year end deposits to this savings account to pay for the furniture when they purchase it three years from now. Assuming that this account pays 8% interest, how much should the year end payments be?

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MistGem
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$5.00 This is an old paper of mine.. I made full credit... All you need to do is reword if you choose to buy

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Posted on Oct 12, 2008 at 7:08:25PM

A:
Preview: ... l in this account after 7 years. F=P*(1+r)^n, r=10%, n=7, P=$33000 P=present value, F= Future value r= rate of interest n=duration =33000*(1+0.1)^7 =$64,307.66 For the final question it is asking how much would Mary and Joe have to pay year end for the next three years to reach their goal of $10,000 if they current amount in t ...

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