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Posts Tagged ‘Question’

Economics question: annual equivalent amount?

01 Jun

The question I have reads as follows:

1. Given: $10,000 at time zero, Interest rate = 5% per year
Find: (a) Future equivalent amount at the end of year 11
(b) Future equivalent amount at the end of 18.5 years
(c) Annual equivalent amount at the end of years 1, 2, 3 and 4
(d) Annual equivalent amount at the end of years 8, 9, 10, 11, 12, and 13

I’m pretty sure I did (a) and (b) correctly. As far as I can tell its just a simple future amount question. I just plugged it into the equation that I have:

F=P(F\P)i,n where(f/p) is a table value based on the values of i, n
= 10,000(1.71)
= 17,100

For (b) I used had to use the equation:

F=P(1+i)^n
and came up with 24,660.51

As I’m said I feel fairly confident on these but I’m confused on what is wanted in (c) and (d). Does it want the total amount that you would have after each time period? And if this is so do I essentially have to repeat the previous equation a few times for each time period? Or is the question asking for something like the annuity, how much you would have to gain every year if you wanted to regain the 10,000 with the specified interest. Or is it something different all together. Any ideas or suggestions you have on any of the portions are greatly appreciated.
Thanks!

 
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Common Law Question on Property?

22 May

My husband was with his ex for 14 years they had a child and bought a home. They separated 6 years ago and he assumed that she was going to stay in the home with the child. Now it has been over 5 years since she sold it. He just found about it last week. He was never notified about the sale. She used the money to pay off money she borrowed on the house. She was left with $80,000 she used that to put a $50,000 down payment on a home and a bought car for $30,000. She ended up loosing the other house to foreclosure. Now she says the he owes her for back child support for the last 6 years. She never asked for anything back then and there was never an order of support. He is currently paying regular child support. Can he sue her for some of the money she got for the house even though they were never married and they put it in her name???????? In court she admitted that she never worked and that he had paid for everything.
Oh yeah, they both live in Illinois.
They were never married. Only lived together so no divorce decree exit about.
They are in court fighting back support that was never ordered. She wants over $31,000. New Illinois law says that there doesn’t have to be an order for support to get it. Also she never asked for a dime in the mean time.

 
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Financial Math Question Issues?

22 May

This is the question…

Which of the following investments is larger after 10 years?

A) An initial amount of $8000 is deposited with $400 deposited monthly, with interest earned at 6.25% compounded monthly.

B) An initial deposit of $9600 is deposited with $4800 deposited annually, with interest earned at 6.25% compounded annually.

I am concerned over the initial deposit with the annuity formula… S=R[(1+i)n-1/i]. None of the examples in the electronic chapter explain where to add the initial deposit and it refers to a chapter the instructor did not give us.

Any help is appreciated.

 
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Math question, please help!?

21 May

The future value Fn of an annuity type of investment is given by the expression Fn=P|(1+i)^n-1/ i) where n is the number of periodic payments P and i is the interest rate over the period of each payment. Tolliver plans to save $1500 each year for 18 years, at an annual interest rate of 6.6%.
a. How much will he have in his account at the end of that time?
b. How much will he have if he saves $1200 for 18 years at 7.25%?

I keep trying to plug in .066 for i and P, 18 for n, and it’s not working.

Please help! What am I doing wrong?

 
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Question about Variable annuity?

20 May

I have a person that is telling me to get a Variable annuity. I heard that they are not good. However; the guy is tell me I get at lease an 8% return on my money. If the market goes higher, then I get more. Is this good or bad.

 
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I need help with a math/finance question. I went to tutoring and we still couldn’t figure it out!?

20 May

The given problem:

A recent college graduate begins a savings plan at age 27 by investing $800 at the end of each month in an account that earns an annual rate of 8%, compounded monthly. If this plan is followed for 10 years, how much should the monthly contributions be for the next 28 years in order to be able to withdraw certain amount at the end of each month from the account for the next 25 years? (For example, you wish to withdraw $8000 at the end of each month. Each group decide how much money to withdraw and be realistic – plan the detail about expenses such as vacation, housing, healthcare, and so on for every month then use that number to calculate)
In the subject of finance, this type of saving plan is called annuity. A HINT to you is that the amount of contribution still be compounded monthly at the same rate after 10 years, 28 years and withdrawing time. We just ignore the rate of inflation here.

The formula we think needs to be used first is A=P(1+APR/n)^(nY)
where:
A = accumulated balance after Y years
P = starting principal
APR = annual percentage rate (as a decimal)
n = number of compounding periods per year
Y = number of years

Do you think that is the right formula or is this one more suiting:
A = Pmt [(1+r/n)^(n*t)-1] / (r/n)

Where:
A = accumulated balance
Pmt = payment
r = APR

Any help will be appreciated.
Thanks!

 
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I need help with a math/finance question. I even went to tutoring and we still couldn’t figure it out.?

17 May

The given problem:

A recent college graduate begins a savings plan at age 27 by investing $800 at the end of each month in an account that earns an annual rate of 8%, compounded monthly. If this plan is followed for 10 years, how much should the monthly contributions be for the next 28 years in order to be able to withdraw certain amount at the end of each month from the account for the next 25 years? (For example, you wish to withdraw $8000 at the end of each month. Each group decide how much money to withdraw and be realistic – plan the detail about expenses such as vacation, housing, healthcare, and so on for every month then use that number to calculate)
In the subject of finance, this type of saving plan is called annuity. A HINT to you is that the amount of contribution still be compounded monthly at the same rate after 10 years, 28 years and withdrawing time. We just ignore the rate of inflation here.

The formula we think needs to be used first is A=P(1+APR/n)^(nY)
where:
A = accumulated balance after Y years
P = starting principal
APR = annual percentage rate (as a decimal)
n = number of compounding periods per year
Y = number of years

Do you think that is the right formula or is this one more suiting:
A = Pmt [(1+r/n)^(n*t)-1] / (r/n)

Where:
A = accumulated balance
Pmt = payment
r = APR

Any help will be appreciated.
Thanks!

 
1 Comment

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Present Value of an Ordinary Annuity Question?

12 May

a lottery to raise funds for a hospital is advertising a $ 240000. The winner will receive $1000 every month for 20 years, starting a year from now. If the interest rate is 8.9% per annum compounded annually, how much must be invested now to have the money to pay this prize?

 
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Investment question about how to track your investments?

06 May

I have a variable universal life insurance policy in which money is invested into im pretty sure mutual funds maybe. But the subaccounts they have are Small/Mid Cap, Small Cap-Idx, Internatil-Idx, Large Cap, Large Cap-Idx, Bond. Thats what is says. Then it lists account value, total units, unit price, ect. Basically i wanted to know how to find those accounts? Do i have to contact to get the specifics, or are those subaccounts already specific enough to find? I want to enter this into Quicken so i can track the losses and gains. Any help would be very helpful. thanks!

 
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algebra question, help please?

03 May

The present value of an ordinary annuity is given by the formula R[1-(1/(1+i)^n / i], where n is given as the number of payments, R is the dollar amount invested, and i is the interest rate, how could this algebraic function be4 simplified?

 
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variable universal life question?

02 May

ok I see a lot of primerica agents in insurance questions like they know what their talking about here’s a question an don’t say buy term invest the rest it doesn’t make sense every persons situation is different an unique. A single 22 year old male in shape no health problems with family history of hearth disease works 9 to 5 has a carpenter making 45K a year that contributes to is 401k an his currently buying a120k home plans to get married at 32 should he buy a VUL policy if no why not an what should he buy thank you for your time i’m sure alot of people will read this post
I think herman is the best answer cause with a family history of a diseas life insurance is important for the long term an even tough variable isn’t for everyone it does provide the best of both worlds if i picked term eventually it would expire an it would cost to much to convert it

 
7 Comments

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Math question, help!?

01 May

The future value Fn of an annuity type of investment is given by the expression Fn=p|1+i)^n-1/i|, where n is the number of periodic payments P and i is the interest rate over the period of each payment. Tolliver plans to save $1500 each year for 18 years, at an annual interest rate of 6.6%.
a. How much will he have in his account at the end of that time?
b. How much will he have if he saves $1200 for 18 years at 7.25%?

 
1 Comment

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Inherited IRA question?

30 Apr

Hi, I am a concerned daughter that is needing some advice from anyone that can be of some help. long story, trying to sum up. My mother inherited an IRA that was invested in stocks after my father passed. While this was great while my parents had my father’s income, now with the decline of the stock market, it’s at a time for us where we need to act fast. With half of her investments gone, we finally seeked advice from a local broker. My question is, can anyone offer me advice on if it would be a good idea to move from the stocks (it’s a genworth investment product) into instead a variable annuity for income purposes. (she earns income from the investment product). Or would it be best to diversify into a series of different things- such as leave some where it is, take some and put into a variable annuity, and put some into a bank ira. If she ever does anything to take the cash out, she’ll be HIGHLY pentalized. What would you recommend doing? Are variable annuities a great thing to be involved with? I’ve read so much, just cannot paint a clear picture to know if it would be a better option for my mother. Also, can you roll over from an investment product to something like a traditional ira with it being considered a “non taxable event”. FOr fyi, she is 53, (54 in may), has no other income except for what she has a liquidity, her house (owes nothing on it), and does not work. Please help!!! I can answer any questions to help get an answer.

 
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Credit question?

28 Apr

Looking to buy a tv worth 3 grand tomorrow. My credit is poor, I think 593, but I get an annuity check for 5 grand next month. I really don’t want to wait until next month for the new tv. Circuit City is where I will purchase the TV at. Do you think they will give me credit to purchase it? Or will I just have to wait until next month? I mean, can I just explain that I am guaranteed to pay off the total cost next month….the annuity is from aig.

 
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