BU111 Study Guide - Sinking Fund, Savings Account, Commercial Bank
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BU111 Full Course Notes
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Note: your answers may be slightly off (i. e. up to ) of the answers shown due to differences in rounding as you work through the solution: you are planning to retire in twenty years. You want to be able to draw out of your savings at the rate of ,000 per year. [: you can deposit per year into an account that pays 12% interest. [. 50: your company must deposit equal annual beginning of year payments into a sinking fund for an obligation of ,000 which matures in 15 years. [: you are considering the purchase of two different insurance annuities. Annuity a will pay you ,000 at the beginning of each year for 8 years. Annuity b will pay you ,000 at the end of each year for 12 years. [. 28: how much should you be willing to pay for an rbc 5 of 2019 if similarly risky investments.
