MT217 Finance_Unit 6 Seminar Alternative Assignment_Jini Li.docx - MT217 Finance Unit 6 Seminar Alternative Assignment Jini Li Kaplan University

MT217 Finance_Unit 6 Seminar Alternative Assignment_Jini Li.docx

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MT217 Finance Unit 6 Seminar Alternative Assignment Jini Li Kaplan University Professor Richard Carter
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Unit 6 Seminar Notes Discussed the big 4 (present value, rate, number of years, future value) and particulars of annuities, where money is put into an account every year, and figuring the future value from this. Went over how to use Excel to figure future value when there are annual payments involved. The difference from solving for FV for a one-time investment is that when you solve for a one time investment, the payment variable is left blank. When you solve for an annuity, you don’t enter the PV into the FV formula, and you enter the annual payment amount instead. Problem example 1 to solve for present value where a person wants to withdraw $100K each year starting at age 65 years old and make the final withdrawal when they are 84 years old. The time spans 19 years. The rate is 3%. Problem example 2 to solve future value where a person is receiving $1,200 at the beginning of the year for 7 years, compounded annually at 9%. This is figuring future value of
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Unformatted text preview: annuity due. Problem example 3 to solve future value of Case A: $22,000 with a rate 7% of over 15 years, ordinary annuity; and Case B: $10,000 with a rate of 12% over 20 years, annuity due. Nothing special is done to the formula for Case A: The type is indicated with a “1” for Case B: Problem example 4: You’re 30 and want to retire at 60 with $1.5 million. How much money do you need to put into a savings count at the end of each year to accomplish this at a rate of 8%? Problem example 5: Person will be putting $3500 into a savings account for 5 years, then $2000 for 5 more years. The first 3 years will have a rate of 6% and the remaining years will be at a rate of 9%. I would figure this in 3 segments, the first 3 years with $3500 at a rate of 6%; the next 2 years with $3500 at a rate of 9%; the remaining 5 years at a rate of 9%. Professor, thank you so much for spending time on quiz examples this seminar. See you next week. Jini References Eakins, S., McNally, W. (2014). CFO Corporate Finance Online . NJ: Pearson Education...
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