take the 25 year annuity or the lump sum? Northeastern costs approximately $50‚000 per year for a four-year program‚ whether completed in four years or five. Assume that a student’s parents realized 15 years ago that college was going to cost $50‚000 per year for four years‚ and wondered how much they would have to save each year to have the money to pay for the student’s education. The assumption is that payments are made into the college fund each year (as an ordinary annuity)‚ and payments are
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safety standards first and foremost (Moran‚ 2008). The Secretary of Labor establishes standards‚ and must set forth the standards preventing employees from suffering any harm. These standards set forth by the Secretary of Labor are only implemented after much research and experiments to ensure reliable standards. Therefore OSHA is more so responsible for establishing the standards and through inspections they are able to ensure those standards are enforced (Moran‚ 2008). 2. The employer must come
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also presents an overview of the problem faced by pension and retirement income intermediaries. In addition of examining the macro environment‚ the report also highlights company internal environment by using SWOT analysis. 2.0 Introduction (Current UK Pension Schemes Market) Due to a rapidly UK population trend‚ there are considerable improvements in longevity and declining state and occupational pension provision‚ has made retirement planning more important than ever before. Start from 2012
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Chapter 09 The Time Value of Money Answer Key True / False Questions 1. An amount of money to be received in the future is worth less today than the stated amount. TRUE 2. Discounting refers to the growth process that turns $1 today into a greater value several periods in the future. FALSE 3. Compounding refers to the growth process that turns $1 today into a greater value several periods in the future. TRUE 4. The interest factor for the future value of a single sum is equal to (1
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Multiple Choice Questions 1. An annuity stream of cash flow payments is a set of: A. level cash flows occurring each time period for a fixed length of time. B. level cash flows occurring each time period forever. C. increasing cash flows occurring each time period for a fixed length of time. D. increasing cash flows occurring each time period forever. E. arbitrary cash flows occurring each time period for no more than 10 years. 2. Annuities where the payments occur at the end of
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Comprehensive Exam Review of attempt 1 Started on | Saturday‚ 22 June 2013‚ 12:23 PM | Completed on | Saturday‚ 22 June 2013‚ 01:39 PM | Time taken | 1 hour 15 mins | Raw score | 67/110 (61%) | Grade | 60.91 out of a maximum of 100 | Question 1 Which of the following could initiate the Accelerated Benefits Provision or Rider of a life policy? Choose one answer. | a. A presumptive disability. | | | b. A condition that is terminal. | | | c. Inability to perform some
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Which one of the following statements is correct concerning annual percentages rates (APRs)? Answer: The APR is equal to the monthly interest rate multiplied by 12 Give an interest rate of zero percent‚ the future value of a lump sum invested today will always: Answer: remain constant Answer: II and IV A firm created as a separate and distinct legal entity that may be owned by one or more individuals or entities is called a: corporation The capital structure of a firm refers to the
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1. James plans to fund his individual retirement account‚ beginning today‚ with 20 annual deposits of $2‚000‚ which he will continue for the next 20 years. If he can earn an annual compound rate of 8 percent on his deposits‚ the amount in the account upon retirement will be 98845.84(since it is a retirement plan so‚ assumed to be annuity due) correct 91‚523.93 – ordinary annuity in this accumulation phase. 2. $100 is received at the beginning of year 1‚ $200 is received at the beginning of year
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you to keep your monthly payments at $1‚200? 54. Calculating Annuities. You have recently won the super jackpot in the Washington State Lottery. On reading the fine print‚ you discover that you have the following two options: a. You will receive 31 annual payments of $175‚000‚ with the first payment being
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Hewitt survey has similar findings— that employers perceive cost volatility as the single greatest threat to the DB pension system.37 Also‚ a 2009 GAO study found that some 26% of plan sponsors would consider forming a new DB plan if the plan funding requirements had more predictability and less volatility.38 Finally‚ a 2009 survey of plan sponsors found that‚ of those employers who remain committed to their DB plans‚ a full 70% would reconsider this commitment should accounting rules or other
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