Quiz1 - Quiz 1 Finance 530 time value of money and bonds...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Finance 530 Quiz 1 time value of money and bonds Print Name: Answer the following questions. The quiz is worth 30 points. Show your calculations to receive full credit. 1. Professor Abbondante tumed 35 today, and he is planning to save $5,000 per year for retirement, with the first deposit to be made one year from today. He will invest in a mutual fund that will provide a retum of 8Yo per year. He plans to retire 30 years from today, when he tums 65, and he expects to live for 25 years after retirement, to age 90. Under these assumptions, how much can he spend in each year after he retires? His first withdrawal will be made at the end of his first retirement year. Hint: this will require 2 calculations. PV PMT FV 0 5,000 566.416 PV PMT FV 566,416 53.061 0 2. You are considering investing in a bank account that pays a nominal annual rate of 6Yo, compounded monthly. If you invest $5,000 at the end of each month, how many years will it take for your account to reach $200,000? NI
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Quiz1 - Quiz 1 Finance 530 time value of money and bonds...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online