need help with my Finance Home work!!?
Question 2 Ed is one of the investors in a partnership that invests in condominiums. This partnership share is Ed?s only asset and he plans to reinvest any proceeds from this investment in his savings account. The partnership will start making cash distributions to investors in one year. Ed expects to receive $5,000 one year from now, $10,000 two years from now and $20,000 three years from now. After the third year the payments will grow at 8% for 7 years and then grow at 3% for the foreseeable future (i.e. to infinity). What is Ed?s net worth at the end of year 3 if the interest rate is 12% (EAR)? Answer: A 333,812.02 B 336,284.02 C 236,628.12 D 296,135.46 E 331,115.71 Question 8 Joe V.I. Pack is planning to retire in five years, on December 31, 2013 (his 65th birthday). His company pension plan will pay him $2,000 per month with the first payment deposited in his checking account on January 1, 2014. Every year, these payments will increase by 3% (all payments made in 2014 are $2,000, all payments made in 2015 are $2,000 ? (1.03), and so on.) Suppose that Joe passes away in an unfortunate firework accident on July 1, 2010. If his widow, Jill, is entitled to 80% of the present value of his expected pension payments upon his death, and Joe was expected to live until December 31, 2023, then how much money will Jill receive? Assume an APR of 9% with monthly compounding. Answer: A 101,078.36 B 99,324.23 C 86,129.02 D 104,918.40 E 104,301.97 Problem 7 (Use data and results from Problem 6 as necessary!) Question 9 Joe?s widow Jill is expected to live until June 30, 2025. She wants to use the money she received from Joe?s company pension to purchase a growing annuity from an insurance company that will provide her with a regular monthly income for the rest of her life. To protect herself from inflation, she wants the payments to increase by 3% per year, just like Joe?s pension payments would have (except that in Jill?s case the payments will increase every year after June 30 instead of increasing after New Year ?s Eve). The first payment from the growing annuity will be deposited in her checking account on July 31, 2010. How big is the first payment? Answer: A 895.67 B 1,013.73 C 1,162.17 D 1,169.04 E 1,600.00 Help!!
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