BFN 110 Lecture Notes - Lecture 5: Tree Farm, Tunxis Community College, Retirement Planning
6 Jan 2021
School
Department
Course
Professor
Document Summary
Saving for an expense in the future. You"re required to analyse the investment potential of a forestry plantation. The cost to invest is ,000 in 2019-08-15. Projected returns from this investment are ,000 in 2022 and ,500 in. Value in 2019 = pv + pv = ,424. 31. Bert and beryl want to establish a fund that will pay ,000 to each of their 2 grandchildren peter and mary when they turn 21. Mary turns 21 in 10 years" time and peter in 12. 5 years time. Harry will receive ,000 per year forever perpetuity. The first ,000 will be received on 1 july 2024. Assume today is 1 july 2019 and interest rates are 5% pa. Pv 2024 = ,000/ 5% = ,000. Today"s value 2019 = ,000 x 1. 05-4 = ,178. 35. You invest at the end of each year for the next 6 years. How much do you have in 10 years assuming an interest rate of 8% pa.
