need help with simple math/investment questions (karma for each question)

[big_bad_buff]

never mind

 

[Devastation]

i like karma, but it's too late to think this hard (it's been waaaay too long)

 

[big_bad_buff]

yeah, i just looked at my class deal and i have until tomorrow to drop the class without any Repercussion to my Financial aid or anything, so i dropped that bitch lol

 

[CFZB]

Buy !

Sell !

Buy !

Sell !

 

[The Red Dragon]

Unfortunately all my accounting buddies are offline...there should be tons of resources on doing these though...but I'm positive there are tons of business people on elite...fuck I should learn this stuff soon.

 

[JakeB]

well if u didnt drop it, at least the answer to number 4 should jump out at u -- 60k right away or 20k/year over 5 year period -- that would come to 100k w/o interest, then u add on the 6% over that 5 year period and the rest is history, u would be stupid to take all the money up front, unless u really really needed it

 

[GoldenDelicious]

i'll hit you 5 times for each question Answered

my text book showed up a week late, so i have until tonight to turn 25 questions in. i have these 5 left and my brain isnt working anymore lol. i need a brake...help pleeeaaasseeee!!!!!!!!

liar! you were up watching Lost, werent you?

1. Suppose you can earn 10 percent on an investment rather than 8 percent. After 20 years, the future value will be 25 percent greater. True or false? Explain

bor, get your calculator and plug in 1.08 to the power of 20. write the number down.

then plug in 1.1 to the power of 20. write the number down.

divide the second number by the first number, and if the result is 1.25 or above, then the statement is true.

the two numbers represent the increase in future value after 20 years for 8% and 10% respectively.

2. You can buy an annuity contract that will pay you $1.000 a year (end of year) for the next 10 years. The contract cost $6,000 today. if you think you should earn 6 percent on such investments, should you buy the contract? Explain showing, your analyses.

1000 a year means you end up with 10000 at the end of it. 6000 earning 6% over 10 years yields $10745, meaning that your period contract earns less than this. so the answer is no.id do more, but....coffee time

 

[UA_Iron]

3. You can invest $40.000 today toward your eventual retirement that will earn 14 percent interest over the period. You want to have $500.000 at the retirement date. How many years away from retirement are you?

500,000=40,000(1.14)^x
12.5=1.14^x

ln(12.5)=xln(1.14)
x=ln(12.5)/ln(1.14)

x=19.276 years

 

[UA_Iron]

thats assuming the period is 1 year

 

[gonelifting]

i'll hit you 5 times for each question Answered

my text book showed up a week late, so i have until tonight to turn 25 questions in. i have these 5 left and my brain isnt working anymore lol. i need a brake...help pleeeaaasseeee!!!!!!!!


1. Suppose you can earn 10 percent on an investment rather than 8 percent. After 20 years, the future value will be 25 percent greater. True or false? Explain

2. You can buy an annuity contract that will pay you $1.000 a year (end of year) for the next 10 years. The contract cost $6,000 today. if you think you should earn 6 percent on such investments, should you buy the contract? Explain showing, your analyses.


3. You can invest $40.000 today toward your eventual retirement that will earn 14 percent interest over the period. You want to have $500.000 at the retirement date. How many years away from retirement are you?

4. your grandmother died recently. She named you as the beneficiary on the insurance contract that will pay $60,000 a year immediately. However, the contract gives you the alternative of taking $20,000a year (end of year) for the next five years. You think that you will earn 6 percent on your investment over this period of time. Given this information, what is the better choice- immediate cash or the extended payout? Explain.

5. Suppose you invest $5.000 for five years at an interest rate of 8 percent. How much simple interest will you earn over the fives year? How much compound interest will you earn? What is the explanation for the difference between the two?

#1"YES" because you make over 30% inthat scenario.

#2 You will make $10745 with your own 6% investment compounded and the annuity will only give you $10,000.

#3 In 20 years you will have $549,739 and have surpassed your 500k goal. In 19 years you would be very close with $482,227. Do you want the exact month? week? day?

#4 $60,000 immediately at 6% will make you $80,293 at the end of the period. $20,000 a year would give you $93,241. Take the 20k/year.

#5 Compound = $2346. Simple = $2000. The simple interest is what you would make on a $5000 investment ($400) then multiply that by 5 years. The compound would ADD... all the interest together and make your each year starting principle higher, thus creating a higher return.

Thanks

 

[gonelifting]

WTF dude? I put some effort into this.

Not really, I love this stuff. *geek*

 

[big_bad_buff]

lol damn homie, yeah i like math, i'm just horrible at it, i's have to study for months and months to get back to where i was at it...anyways, i'll hit you up for the effort, thanks man

WTF dude? I put some effort into this.

Not really, I love this stuff. *geek*

 

[big_bad_buff]

ok, i have 40 points to give out, havent given any to anyone in like 6 months, but yet it says i have to spread it around before i give it to you

 

[big_bad_buff]

that's on wed buddy

liar! you were up watching Lost, werent you?

bor, get your calculator and plug in 1.08 to the power of 20. write the number down.

then plug in 1.1 to the power of 20. write the number down.

divide the second number by the first number, and if the result is 1.25 or above, then the statement is true.

the two numbers represent the increase in future value after 20 years for 8% and 10% respectively.

1000 a year means you end up with 10000 at the end of it. 6000 earning 6% over 10 years yields $10745, meaning that your period contract earns less than this. so the answer is no.id do more, but....coffee time

 

[hamstershaver]

i told gl all the answers btw, i just let him post it to make him look smart

 

[big_bad_buff]

man, i didnt even think anyone read all that before i deleted it lol...i hit you up anyways

500,000=40,000(1.14)^x
12.5=1.14^x

ln(12.5)=xln(1.14)
x=ln(12.5)/ln(1.14)

x=19.276 years