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Nabeel Dillawant

Nabeel D.

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Questions asked

INSTANT ANSWER

16. A loan of $250,000 is taken out at an effective rate of interest of 7.5% per annum., level loan repayments are made monthly in arrears such that the loan will be fully repaid 20 years after it is taken out. If repayments are insufficient to cover the interest due, then the loan will be increased to cover the shortfall. a. Determine the monthly payment b. Construct the loan schedule. c. What is the accumulated interest amount for the first 18 month? d. What is the outstanding capital amount still due after the 98th payment? e. What is the interest amount in the 67th payment? f. What is the capital amount in the 36th payment?

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ANSWERED

Minh Le verified

Numerade educator

15. The force of interest, ?(t), is a function of time and at any time t, measured in years, is given by the formula: ?(t) = { 0.05 + 0.001t 0 ? t ? 20 { 0.05 t > 20 a. Derive and simplify as far as possible expressions for v(t), where v(t) is the present value of a unit sum of money due at time t. b. Calculate the present value of $100 due at the end of 25 years c. Calculate the rate of discount per annum convertible quarterly implied by the transaction in part (b).

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ANSWERED

Minh Le verified

Numerade educator

14. The force of interest, ( delta ) (t)is a function of time and at any time t, measured in years, is given by the formula: [ delta(t)=left{egin{array}{ll} 0.03+0.01 t & 0 leq t<4 \ 0.07 & 4 leq t<6 \ 0.09 & t geq 6 end{array} ight. ] Calculate the accumulated amount at time ( t=7 ) of a lump sum of 100 units invested at time ( t=0 )

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ANSWERED

Minh Le verified

Numerade educator

13. The force of interest, ?(t), is a function of time and at any time t, measured in years, is given by the formula: ?(t) = { 0.09 ? 0.003 t 0 ? t ? 10 0.06 t > 10 } a. Calculate the corresponding constant effective annual rate of interest for the period from t = 0 to t = 10. b. Express the rate of interest in part (a) as a nominal rate of discount per annum convertible half-yearly. c. Calculate the accumulation at time t = 15 of £1,400 invested at time t = 3.

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ANSWERED

Jon Southam verified

Numerade educator

12. A client can choose between receiving 18 annual $100,000 retirement payments, starting one year from today, or receiving a lump sum today. Knowing that he can invest at a rate of 7 percent annually, he has decided to take the lump sum. What lump sum today will be equivalent to the future annual payments?

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ANSWERED

Federico Castro verified

Numerade educator

10. A German pension fund manager anticipates that benefits of €1 million per year must be paid to retirees. Retirements will not occur until 10 years from now at time t = 10. Once benefits begin to be paid, they will extend until t = 39 for a total of 30 payments. What is the present value of the pension liability if the appropriate annual discount rate for plan liabilities is 5 percent compounded annually?

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ANSWERED

Federico Castro verified

Numerade educator

9. You are retiring today and must choose to take your retirement benefits either as a lump sum or as an annuity. Your company’s benefits officer presents you with two alternatives: an immediate lump sum of $2 million or an annuity with 20 payments of $200,000 a year with the first payment starting today. The interest rate at your bank is 7 percent per year compounded annually. Which option has the greater present value? (Ignore any tax differences between the two options.)

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ANSWERED

Jon Southam verified

Numerade educator

5. Suppose your company’s defined contribution retirement plan allows you to invest up to €20,000 per year. You plan to invest €20,000 per year in a stock index fund for the next 30 years. Historically, this fund has earned 9 percent per year on average. Assuming that you actually earn 9 percent a year, how much money will you have available for retirement after making the last payment?

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INSTANT ANSWER

“Tax evasion and tax avoidance costs the UK government £34 billion a year.” a) In the light of the above statement, explain the terms tax evasion and tax avoidance? (10 marks) b) Discuss the measures that the UK government are taking to mitigate tax avoidance and tax evasion? (20 marks) Word limit: 2000-3000 words

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ANSWERED

Christopher Stanley verified

Numerade educator

You are the lucky winner of your state’s lottery of $6 million after taxes. You invest your winnings in a five-year certificate of deposit (CD) at a local financial institution. The CD promises to pay 8 percent per year compounded annually. This institution also lets you reinvest the interest at that rate for the duration of the CD. How much will you have at the end of five years if your money remains invested at 8 percent for five years with no withdrawals?

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