This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: compounded semiannually, how much does she need to deposit today to reach her goal? 2 nd CLR TVM 10,000,000 FV 8/2 = I/Y 60 N CPT PV 950,604.01 Cindy wants to withdraw $10,000 per month for the next 5 years. She will withdraw her first amount in one month. The bank pays interest at 12% compounded monthly. How much does she need to deposit today to do this? 2 nd CLR TVM 10,000 PMT 12/12 = I/Y 5 x 12 = N CPT PV 449,550.38 Chris hit the lottery!! She has the option of taking $520,000 today or $90,000 per year for the next 8 years, or $85,000 per year for the next nine years or $1,000,000 in ten years. If she can deposit her money at 6%, ignoring taxes, which deal should she take? Deal 1 520,000 Deal 2 2 nd CLR TVM 90,000 PMT 8 N 6 I/Y CPT PV 558,881.44 Deal 3 2 nd CLR TVM 85,000 PMT 9 N 6 I/Y CPT PV 578,143.84 Deal 4 2 nd CLR TVM 10 N 6 I/Y 1,000,000 FV CPT PV 558,394.78...
View
Full
Document
 Spring '10
 DrKirch

Click to edit the document details