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Mandarinka [93]
2 years ago
13

Your friend Bob just retired after running a donut shop for 40 years. He has saved $3.5 million in his retirement accounts. Now

he has his money in bond funds that have a 5% annual rate of return.
A) How much will Bob be able to withdraw at the beginning of each month for the next 30 years? Assume he will have $0 left after year 30.
Business
1 answer:
Readme [11.4K]2 years ago
8 0

Answer:

$18,711.57

Explanation:

The amount that the Bob will be getting at the beginning of the each month for the next 30 years shall be determined through the present value of annuity formula which shall be determined as follows:

Present value of annuity=R+R[(1-(1+i)^-n)/i]

R=Amount that he will be getting per month for next 30 years=?

i=interest rate per month=5/12=0.4167%

n=number of payment involved=30*12=360 and since the first payment is made at the start of month, therefore the n=359

Present value of annuity=$3,500,000

$3,500,000=R+R[(1-(1+0.4167%)^-359)/0.4167%]

$3,500,000=R+186.05R

$3,500,000=187.05R

R=$18,711.57=payment per month

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1 year ago
A quantitative method used to evaluate multiple locations based on total cost of production or service operations is called:
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Answer:

Load-distance method.

Explanation:

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Green Roof Inns is preparing a bond offering with a 6 percent, semiannual coupon and a face value of $1,000. The bonds will be r
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Green Roof Inns is preparing a bond offering with a 6 percent, semiannual coupon and a face value of $1,000. The bonds will be repaid in 10 years and will be sold at par.-The correct statement is -<u>The bonds will sell at a premium if the market rate is 5.5</u>

Explanation:

The important point to be noted from the given question is that the bond is offered when the market rate is 6 percent.

So ,the bonds are said to selling at premium since the market rate has reduced from 6% to 5.5%

In this case it is right to say that -Green Roof Inns is preparing a bond offering with a 6 percent, semiannual coupon and a face value of $1,000. The bonds will be repaid in 10 years and will be sold at par.-The correct statement is -<u>The bonds will sell at a premium if the market rate is 5.5</u>

4 0
1 year ago
TLC Credit, Inc. has $35.0 million in consumer loans with an average interest rate of 12.0%. The bank also has $30.0 million in
MissTica

Answer:

$460,000 decrease

Explanation:

The computation of TLC's estimated change in revenues next year is shown below:-

TLC's estimated change in revenues next year = ((Consumer loan × Interest rate) + (Home equity loan × Interest rate) + (Corporate securities × Interest rate)) - ((Increased consumer loan × Decrease rate) + (Increase equity loan × Interest rate) + (Corporate securities × (1 - decreased percentage) × average interest rate))

= (($35.0 million × 0.12) + ($30.0 million × 0.O8) + ($5.0 million × 0.06)) - (($40.0 million × 0.10) +($32.0 million × 0.065) + (5 million × (1 - 20%)  × 0.09))

=$6,900,000 - $6,440,000

= $460,000 decrease

Therefore for computing the TLC's estimated change in revenues next year we simply applied the above formula.

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1 year ago
Systems that enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that p
zheka24 [161]

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