Friday

July 25, 2014

July 25, 2014

Posted by **rhonda Porter** on Monday, November 26, 2012 at 10:06pm.

Mary has been working at the university for 25 years, with an excellent record of service. As a result, the board wants to reward her with a bonus to her retirement package. They are offering her $75,000 a year for 20 years, starting one year from her retirement date and each year for 19 years after that date. Mary would prefer a one-time payment the day after she retires. What would this amount be if the appropriate interest rate is 7%?Mary’s replacement is unexpectedly hired away by another school, and Mary is asked to stay in her position for another three years. The board assumes the bonus should stay the same, but Mary knows the present value of her bonus will change. What would be the present value of her deferred annuity?

Mary wants to help pay for her granddaughter Beth’s education. She has decided to pay for half of the tuition costs at State University, which are now $11,000 per year. Tuition is expected to increase at a rate of 7% per year into the foreseeable future. Beth just had her 12th birthday. Beth plans to start college on her 18th birthday and finish in four years. Mary will make a deposit today and continue making deposits each year until Beth starts college. The account will earn 4% interest, compounded annually. How much must Mary’s deposits be each year in order to pay half of Beth’s tuition at the beginning of each school each year?

- time value -
**joe oke**, Wednesday, September 18, 2013 at 3:56pmsadsadASEFAF

**Related Questions**

Finance - 1. A man establishes an annuity for retirement by depositing $50,000 ...

Algebra - Show how you substitute the values into the formula, then use your ...

math - Inflation is running 2% per year when you deposit $1000 in an account ...

Precalculus - NEED HELP ASAP PLEASE!! A savings account starts with $600 and ...

finance - Suppose you pay $1000 into a savings account that pays 2% per year, ...

math - if you invest 500 dollars in a savings account that pays 8% interest per ...

Finance - Annuities - Natasha plans to deposit $4,000 per year in her account ...

Finite Mathematics - If a merchant deposits $1,500 annually at the end of each ...

math - College is expected to cost $150,000 per year in 18 years, how much ...

Math - Mary B deposits $8500 into a savings account, compounded monthly at a ...