106 Disc wk 4 - BUS 106 Discussion BUS 106 Discussion Week...

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Unformatted text preview: BUS 106 Discussion BUS 106 Discussion Week 4 Week 4 TA: Jessica Yount Today Today Attendance Review Example Homework 3 due Monday by 11:59pm Homework 4 due Wednesday by 11:59pm Grades will be posted soon (each out of 100) Review Review FV = PV * (1 + R) N PV = FV / (1 + R) N PVAF(r, n) = PV{w/ growth rate} = n: # terms (years) r: annual yield of savings account S: annual savings payment g: growth rate of income Homework 3 Practice Problem Homework 3 Practice Problem This is Summer 2011, and you want to work out whether going to graduate school for your MBA, an otherwise desirable proposition in every respect, is a financially sound decision. You have been offered a job that pays $90,000 per year starting September 1, 2011, and you plan to take it up if you do not go for an MBA. If you do go for an MBA, you will: a) have to pay $30,000 each on September 1, 2011, and September 1, 2012 toward the cost of education, and b) start earning only upon graduation, with your post-MBA job starting on September 1, 2013. For computational simplicity, assume that you are paid your annual salary in a lump sum at the end of each working year. You plan to retire on August 31, 2045 whether or not you go for an MBA in 2011. For the purposes of this problem you find it reasonable to assume that for an MBA in 2011....
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106 Disc wk 4 - BUS 106 Discussion BUS 106 Discussion Week...

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