This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: annuity due method would only provide $960,000 at the end of 12 years while the single lump sum method will provide $1,900,000. The interest rate on both methods would be about 9.5%. (b) 8% (c) $724,584 = 2% discount rate over 5 years (arrived by considering total return of 10% = 8% stated + 2% discount rate) (d) Target savings $1,300,000. Single sum of $200,000 @ 2.5% for 40 periods = $537,012 Rent amount of $30,394.56 @ 2.5% for 40 periods = $762,988 $1,300,000 Answer is: Rent amount of $30,394.56 at the end of each quarter for 10 years....
View
Full
Document
This note was uploaded on 09/29/2011 for the course ACC 311 taught by Professor Hiles during the Spring '11 term at University of Phoenix.
 Spring '11
 Hiles
 Accounting, Balance Sheet

Click to edit the document details