Blog

Grace is retiring today and has $300,000 in her retirement savings. She expects to earn 8.5 percent per year compounded monthly. How much can she withdraw from her retirement savings each month if she plans to spend her last penny 17 years from now?

Your grandparents would like to establish a trust fund that will pay you and your heirs $140,000 per year forever with the first payment 13 years from today. If the trust fund earns an annual return of 2.7 percent, how much must your grandparents deposit today?

A bond that pays interest semiannually has a price of $981.73 and a semiannual coupon payment of $27.75. If the par value is $1,000, what is the current yield?

Teddy’s Pillows had beginning net fixed assets of $458 and ending net fixed assets of $524. Assets valued at $306 were sold during the year. Depreciation was $16. What is the amount of net capital spending?

Buxbaum Corporation is preparing a bond offering with a coupon rate of 6 percent, paid semiannually, and a face value of $1,000. The bonds will mature in 10 years and will be sold at par. Given this, which one of the following statements is correct?

You find the following financial information about a company: net working capital = $816; fixed assets = $5,577; total assets = $8,286; and long-term debt = $4,359. What are the company’s total liabilities?

There is a zero coupon bond that sells for $4,692.75 and has a par value of $10,000. If the bond has 13 years to maturity, what is the yield to maturity? Assume semiannual compounding.

You just paid $480,000 for an annuity that will pay you and your heirs $15,000 a year forever. What rate of return are you earning on this policy?

A new sports coupe costs $41,750 and the finance office has quoted you an APR of 7.7 compounded monthly for 36 months. What is the EAR?

A company has net working capital of $1,726. If all its current assets were liquidated, the company would receive $5,663. What are the company’s current liabilities?