Mr. Lehoc has just retired after 23 years with the company. His total pension funds currently have an accumulated value of $351,000, and his life expectancy is 20 years. His penshion fund manager assumes he can earn 15% return on his assets. What will be his yearly annuity for the next 20 years?
Jennice won in a lottery. Now she has to select one of the three following alternatives: $1,000 now, $200 a year for ten years, or $4,000 at the end of 10 years. Assuming she could earn 12% annually, which alternative should she use?
Apple Software has $1,000 par value bonds outstanding with 12% coupon. The bonds will mature in 25 years. Compute the current price of the bonds if the present yield to maturity is 8%.
Figured out everything else but these three are giving me problems….