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 semi-annually, 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