Corporate finance class question | Business & Finance homework help

Get Custom Essay on Corporate finance class question | Business & Finance homework help

Let Our Team of Pofessional Writers Take Care of Your Paper.

Question 1

 Lee plans to retire in 22 years with a nest egg of $8M. He has already saved $500,000 in an investment account that generates a nominal rate of return of 12%, compounded quarterly. However, he needs to withdraw $150,000 from this account in 10 years to finance his son’s college education.

(a) Numerically show that whether Lee’s investment account balance will reach $8M in 22 years, based on the information provided above. The Answer = $6.12M

(b) The correct answer for part (a) indicates that Lee’s investment account will fall short of his retirement goal of $8M in 22 years. Thus, he continues his pursuit by making additional fixed contributions at the end of every quarter to the same investment account until he retires 22 years later. How big should be his quarterly contribution in order to achieve his goal? The Answer=$4,522.18

(c) Assume now that Lee retires and has $8M in his investment account. If he wants to leave $10M to each of his two children upon his death after enjoying 25 years of retirement. What is the maximum annual withdrawal from the investment account Lee can make at the beginning of every year during his retirement?

The Answer =$818,587.57

 

PS:The answer to the questions was provided by the instructor, i need a detailed solution of how to arrive at the answers.

 

Get 20% Discount on This Paper
Pages (550 words)
Approximate price: -

Try it now!

Get 20% Discount on This Paper

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Best Quality Essays has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.

Essays

Essay Writing Services

At Best Quality Essays, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.

Admissions

Admission and Business Papers

Be assured that you’ll definitely get accepted to the Master’s level program at any university once you enter all the details in the order form. We won’t leave you here; we will also help you secure a good position in your aspired workplace by creating an outstanding resume or portfolio once you place an order.

Editing

Editing and Proofreading

Our skilled editing and writing team will help you restructure you paper, paraphrase, correct grammar and replace plagiarized sections on your paper just on time. The service is geared toward eliminating any mistakes and rather enhancing better quality.

Coursework

Technical papers

We have writers in almost all fields including the most technical fields. You don’t have to worry about the complexity of your paper. Simply enter as much details as possible in the place order section.