Finance Time Value of Money Questions URGENT HELP NEEDED

Question

Hello, Please help if you can. How do you solve these 4 (not the answers, just how to solve step by step ) thanks.

1. Calculate the future value at the end of twenty-five years of the following cash flows (CF's) if the rate of interest is 4.7-percent compounded annually: (i) Eight consecutive CF's of $389 at one year intervals beginning at the end of year 4 (t = 4) and (ii) Fourteen consecutive CF's of $457 at one year intervals beginning at the end of year twelve (t = 12).

2. Calculate the future value at the end of fifteen years (t = 15) if you deposit $919 at one year intervals for eight consecutive years (i.e. eight deposits) beginning at the end of year three (t = 3) and given that the rate of interest is 3.8-percent compounded annually.

3. Suppose that you are planning to retire in 35-years and you desire an annual income of $65,089 per year beginning at the end of year thirty-six and lasting for 40-years (i.e. 40 annual CF's). How much must you accumulate (i.e. save up) by the end of 35-years in order to finance all of your retirement disbursements if the rate of interest is 8.7-percent compounded annually?


4.Suppose that you are planning to retire in thirty years and you desire an annual income of $63,913 per year beginning at the end of year thirty-one and lasting forever. How much must you accumulate (i.e. save up) by the end of thirty years in order to finance all of your retirement disbursements if the rate of interest is 9-percent compounded annually?
Thank you 

Answer 1

... Excel has Financial functions to calculate answers for :  Net present value (NPV), Future Value (FV), Internal Rate of Return (IRR) ... Cash Flows (CF)

 

 

Q1, Q2
… What does each CF represent : is it money received or money paid out? .... Interest is not paid or compounded on a 'zero' balance …. e.g years 1-3 … there is not enough information to make a determination …



Q3
1) ..determine total sum of CFs : 40 annual payments of $65,089

2) ..using sum determined, calculate the discounted NPV of a lump sum 'savings' amount needed on deposit in the first year of 40 annual payments, using 8.7% interest

3) ..using amount calculatd in step 2, you can determine the discounted NPV lump sum deposit for year one, of the first 35 years before the start of $65,089 annual payments, using 8.7% interest accumlating over 35 years. You can also determine monthly, quarterly, semi annual or annual payments accumlating over 35 years using a 8.7% interest ...

4) ..using amount calculated in step 2, you can determine the discounted NPV lump sum deposit for year one, of the first 36 years before the start of $65,089 annual payments, using 8.7% interest accumlating over 36 years. You can also determine monthly, quarterly, semi annual or annual payments accumlating over 36 years using a 8.7% interest ...


Q4
is it a lifetime annuity? Tax laws apply …