Marie has a 1,000,000 investment portfolio and she wishes to ...

[haleyc112]

Marie has a 1,000,000 investment portfolio and she wishes to spend 87,500 per year as an ordinary annuity. If the investment account earns 6 annually, how long will her portfolio last? Use a calculator to determine your answer.
 
  A) 11.43 years
  B) 14.17 years
  C) 19.86 years
  D) 23.08 years

Question 2

Edward wishes to save enough money to purchase a retirement lake cabin. He is willing to spend 500,000 for the cabin and he can save 25,000 per year and invest the money into an account earning 8.00 per year.
 
  If Edward's investments come in the form of equal annual end-of-the-year cash flows and the first cash flow is in exactly one year, how long will it take him to save enough money to buy the lake cabin?
  A) Between 8 and 9 years
  B) Between 10 and 11 years
  C) Between 12 and 13 years
  D) Exactly 20 years

[ricroger]

Answer to Question 1

Answer: C
Explanation: C) MODE = END
INPUT ? 6.0 -1,000,000 87,500 0
KEY N I/Y PV PMT FV
CPT 19.86

Answer to Question 2

Answer: C
Explanation: C) n = ln /ln(1 + r) = ln /ln(1.08) = 12.42 years.
MODE = END
INPUT ? 8 0 25,000 -500,000
KEY N I/Y PV PMT FV
CPT 12.42

[haleyc112]

Thanks for the timely response, appreciate it

[raili21]

YES! Correct, THANKS for helping me on my review