Im having some difficulty with the following problems. Can someone please guide me on how to solve them?
1) Suppose Sean invests P dollars today in a new company. In return, the company will pay him 185.65 dollars per year, starting with year 19 and ending with year 45 . In addition, in the last year (i.e., year 45) the company will pay Sean a lump-sum (i.e., a single) amount equal to 804.29 dollars. What is the P amount such that Sean achieves an annual rate of return equal to 185.65/804.29 per year ?
For this problem i think the part im stuck on is how to handle the rate or return. I know how to manage the shifted annuity.
2) Suppose interest is 17.13% per year, compounded daily. Assume there are 364 days in one year.
Find the present value of the uniform series given by
given the payment period length is "one week" , that is, 1/52 of a a year.
For this one im confused by the first sentence, how can interest be 17.13% per year compounded daily?
3) Pat is an excelent tennis player. Her friend Mat estimated that if she becomes a professional player today, her income will be 9 dollars in year 1 and then will continue to increase by 25.78% each year until year 8. According to Mat's estimates, Pat will be at her peak in year 8. After that point in time, her income in each period will be only 1/7 of her income in the previous period. Suppose Mat's predictions are correct. If Pat plans to retire at the end of year 14 and to save 1/7 of her income each year in an account paying interest at 21% per year, how much will she accumulate by the end of 14?
For this one i have tried to sole several times, id like it if someone could provide the steps, i cant seem to do this one correctly and have difficult with finding the 1/7th of the income. do i have to do this for each year or can i find the present value of the series and multiply by 1/7?
In short this one will need to be spelled out for me im new at these problems.
Thank you for your help! I hope i didnt break any rules by posting several questions in on thread, i just didnt want to clutter up the forum.