Author Question: Probate costs are costs associated with A) outstanding loans due. B) drawing up the ... (Read 16 times)

stephzh · **on:** Jul 11, 2018

Probate costs are costs associated with

A)

outstanding loans due.
B)

drawing up the life insurance contract.
C)

validating your will and distributing your estate.
D)

providing an ongoing maintenance fund.

Question 2

A retirement home in Florida costs 200,000 today. Housing prices in Florida are increasing at a rate of 4 per
year. Joe wants to buy the home in 8 years when he retires. Joe has 25,000 right now in a savings account
paying 8 interest per year.

Joe wants to make eight equal annual deposits into the savings account starting
today. How much must each deposit be so Joe will have enough money in his savings account to buy the
retirement home when he retires?

brbarasa · **Reply #1 on:** Jul 11, 2018

Answer to Question 1

C

Answer to Question 2

19,798.86; The future value of the home in 8 years is 273,713.80 (PV = 200,000, I = 4, N = 8, solve for FV); The
future value of the savings account in 8 years is 46,273.26 (PV = 25,000, I = 8, N = 8, solve for FV); The difference of
227,440.54 is the additional amount Joe needs in 8 years. Since Joe is making equal annual deposits starting today, the
227,440.54 is the future value of an annuity due. The payment amount is 19,798.86 (FVA due = 227,440.54; N = 8, I =
8, mode = BEG, solve for PMT).;