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Please answer the following questions containing time value problems. Your Aunt Matilda Mae makes you...

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Finance

Please answer the following questions containing time value problems.

  1. Your Aunt Matilda Mae makes you the following offer: $15,000 upon graduation in one year or $18,000 upon MBA graduation in 3 years. Which offer should you take if current rates are 14% (Hint: take the one with the highest present value!)

2. Jimmy has $255,906 accumulated in a 401K plan. The fund is earning a low, but safe, 3% a year. The withdrawals will take place at the end of each year starting a year from now. How soon will the fund be exhausted if Jimmy withdraws $30,000 each year?

3. How much must be invested now at 9% interest to accumulate to $10,000 in five years?

4. Claudine Corporation will deposit $5,000 into a money market sinking fund at the end of each year for the next five years. How much will accumulate by the end of the fifth and final payment if the sinking fund earns 9% interest?

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