IN-320-X5407 Principles of Finance 18EWS omework: 5-2 MyFinanceLab Assignment co
ID: 2618577 • Letter: I
Question
IN-320-X5407 Principles of Finance 18EWS omework: 5-2 MyFinanceLab Assignment core: 0 of 4 pts 5-12 (similar to) Related to Checkpoint 5.4) (Present value) Sarah Wiggum would ke to make a single investment and have $1 5 million at the time of her retirement in 28 years. She has found a mufusal fund that Latruma Sinegal &1 6/24/18 6:34 P 7 of 12 (6 complete) HW Score: 43 47%, 21, 73 of 50 Question Help will earn 6 percent annually How much will Sarah have to invest today? If Sarah eamed an annual retun of 14 percent, how soon could she then retire? a. If Sarah can earn 6 percent annually for the next 28 years, the amount of money she will have to invest today is (Round to the nearest cent) Enter your answer in the answer box and then cick Check AnswerExplanation / Answer
a. $293,445.21
Using financial calculator BA II Plus - Input details:
At 6% rate
I/Y = Rate or yield =
6.00
PMT = Payment =
$0.00
N = Total number of periods =
28
FV = Future Value =
-$1,500,000.00
CPT > PV = Amount needed today =
$293,445.21
Or PV = 15000000 / (1+6%)^28 = $293,445.21
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(Just doing as mentioned in question)
At 14% rate
Using financial calculator BA II Plus - Input details:
At 14% rate
I/Y = Rate or yield =
14.00
PMT = Payment =
$0.00
N = Total number of periods =
28
FV = Future Value =
-$1,500,000.00
CPT > PV = Bond Value =
$38,260.92
Using financial calculator BA II Plus - Input details:
At 6% rate
I/Y = Rate or yield =
6.00
PMT = Payment =
$0.00
N = Total number of periods =
28
FV = Future Value =
-$1,500,000.00
CPT > PV = Amount needed today =
$293,445.21