6.32 Calculating Annuities [LO1] You are planning to save for retirement over the next 30 years. To do this, you will invest $800 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account will pay 6%. When you retire, you will combine your money into an account with a 7 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?
[Excel] 6.6 Calculating Annuity Values [LO1] Your company will generate $68,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 8.5%, what is the present value of the savings?
[Excel] 6.46 Present Value and Break-Even Interest [LO1] Consider a firm with a contract to sell an asset for $145,000 four years from now. The asset costs $81,000 to produce today. Given a relevant discount rate on this asset of 13 percent per year, will the firm make a profit on this asset? At what rate does the firm just break even?
[Excel] 6.70 Calculating Interest Rates [LO4] A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $13,000 each, with the first payment occurring today, your child’s 12th birthday. Beginning on your child’s 18th birthday, the plan will provide $30,000 per year for four years. What return is this investment offering?
Extra Credit 6.61 Calculating Annuity Values [LO1] You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years