Archive for High Interest Annuities
Managing Generation Y
An interview with Tammy Erickson, President of The Concours Institute. Tammy has co-authored four Harvard Business Review articles and the books “Retire Retirement: Career Strategies for the Boomer Generation” and “Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent.”
Please visit her blog at HarvardBusiness.org.
Duration : 0:9:52
Hamilton30seconds
High interest savings accounts, certificates and annuities. retirement high yield
Duration : 0:0:31
Finding monthly payments?
You borrow $4000 from the bank at 19% interest compounded monthly. You decide to repay the loan over 3 years. How do you find each monthly repayment? Apparently because the interest rate is too high you cannot use the annuity formula.
Okay, so the formula is:
Payment = (I x Principle) / (1 – (1 + I) ^-n)
I = Interest rate at the time of the payment (in this case 19% / 12).
n = The number of periods.
Put it all together and you get:
146.62 = (0.0158 x 4000) / (1 – (1 + I) ^-(36))
So $146.62 a month.
@ soccerref: Just because something is commonplace doesn’t make it acceptable. It is absolutely wrong to charge 19% interest on any amount of money. They would make the same profit by issuing three 6.3 percent interest loans of the same amount, and in the end it would be better for everyone.
ENGLISH TO MARATHI TRANSLATION ?
Pl send the following translation into marathi & send me by email.
6) ISSUES – a) Gauge – Is independent of technology & BG exist on IR. & additional safety on curves
b) Width of coach – provides 25% more capacity, and comfort due to better sitting capacity
c) Train length – for a given volume of traffic, reduces capital cost of coaches due to reduction in
numbers, reduces energy cost & O & M cost.
d) Imported Coaches 3 times costly than indigenous coaches . No need to purchase assets for technology.
e) Indigenous coaches – Manufacturing expertise available within the country for BG wider coaches.
7) OTHER ISSUES –a) Curves – BG can negotiate 100m curves – BART metro San Francisco USA
b) Frequency of service – BG can have 2min freq. At present at operated at 3min freq. W&C Rly
– No need to inflate capital cost for adopting ATC & ATO for 3min service
c) Capital cost – 30% lower for equivalent capacity. Cost to be compared per unit carrying capacity.
d) Land Cost – Due to reduction in length of train large saving in depot land & at stations
e) Safety & Comfort – BG provides improved safety and comforts & permits higher speeds on curves
Govt. Misguided – a) On technology – Technology is independent of gauge
– BART Metro in San Francisco in USA is on BG with best of the world technology
b) Cost – Cost of BG per unit carrying capacity is lower for BG than that for SG
– Absolute cost of BG is 25% lower due to reduced number of coaches per train for eq. volume
c) Land requirements- BG requires lower cost due to reduced train length for eq. volume
d) No transparency – DPR is not installed on internet nor disclosed to public to avoid comments of deficient, defective, unsafe and abnormally costly imports of technology, though appropriate technology for corresponding requirements of performance are available in the country.
9) Methodology – EPC vs PPP – EPC model with govt. funding is 25-30% economical
•PPP model investor abnormally inflate the cost resulting in 30-50% VGF subsidy
•No VGF subsidy is required for BG with wider coaches for performance at 3min service.
•PPP investor misusage the VGF subsidy for abnormally large payments to int. manufactures for importing coaches
•A mixed PPP model for Rly projects if adopted, should be BOLT/deferred payment/annuity payments for fixed assets and maintenance, while EPC model to be adopted by the govt. for operations & procurement of mobile assets to ensure standardization
•The savings of VGF subsidy to be utilized for setting up of a coach manufacturing unit for BG wider coaches which can be achieved within 2 yrs and less than Rs 1000 crores and within the construction period of 5 yrs, taking into consideration the demand for all new metros within the country. This will achieves standardization of coaches.
10) LEGAL ASPECTS
•Art. 366/22 and art 246 does not permit the state govt. to construct operate and maintain a Rly project, even within a municipal jurisdiction as well as connecting metro systems between two adjoining municipal jurisdiction
•State has no constitutional jurisdiction, to plan construct, operate and maintain, metro rail between PMC & PCMC
•Policy directive issued by MOUD to states, to decide the subject of gauge, is against the provisions of the constitution.
•A.G.’s opinion that metro rail planned within a municipal jurisdiction can be considered as tramway and implemented under the tramways act by the states, is technically and under the IR’s act 1989 & tramways act 1889 is no applicable and his opinion has not been specifically approved by the Law Ministry at the centre. Hence the gazette notification issued by the GOM to implement metro rail under the tramways act is illegal and void under the constitution.
11) CONCLUSION
•The state has no legal jurisdiction under the constitution to connect PMC & PCMC by a metro rail system as planned. This power vests only with the centre and IR
•What we emphasize, is that from considerations of capacity, comfort, safety, and economics, adoption of a BG system, with wider coaches, with 18 tonne axle load and with schedule of dimensions to accommodate wider coaches and a future provision of about 10 to 12 coaches per train, is a must for CBM & future corridors, like in Pune, in public interest and for the future generation of the Mumbai City.
•We should set up
i think this is an english site…
I need help with answering these financial question… just formulas would even be helpful.?
1If managers are making decisions to maximize shareholder wealth, then they are
primarily concerned with making decisions that should:
a. Positively affect profits.
b. Increase the market value of the firm’s common stock.
c. Either increase or have no effect on the value of the firm’s
common stock.
d. Accomplish all of the above.
2A firm has return on equity of 20% and a total asset turnover of 4. Assuming
a debt ratio of 50% and sales of $1,000,000, calculate net income.
a. $25,000
b. $50,000
c. $75,000
d. $100,000
3The trading of negotiable certificates of deposit takes place on the:
a. Chicago Board of Trade.
b. New York Stock Exchange.
c. American Stock Exchange.
d. None of the above.
4As the cost of capital is increased, the:
a. IRR remains constant.
b. Payback period remains the same.
c. Discounted payback period increases.
d. Both "b" and "c".
e. All of the above
5You have just won a magazine sweepstakes and have a choice of three
alternatives. You can get $100,000 now, or $10,000 per year in perpetuity, or
$50,000 now and $150,000 at the end of 10 years. If the appropriate discount
rate is 12%, which option should you choose?
a. $100,000 now
b. $10,000 perpetuity
c. $50,000 now and $150,000 in 10 years
6The break-even quantity of output results in an EBIT level equal to:
a. Fixed costs.
b. Contribution margin.
c. Zero.
d. Variable costs.
7If the NPV of a project is positive, then the project’s IRR _________________
the required rate of return.
a. must be less than
b. must be greater than
c. could be greater or less than
d. cannot be determined without actual cash flows
8Given a 360-day year, the effective annual cost of not taking advantage of the
3/10, net 30 terms offered by a supplier is:
a. 55.7%.
b. 45.4%.
c. 32.3%.
d. 28.2%.
9A company is technically insolvent when:
a. Cash outflows in a given period are greater than cash inflows.
b. Earnings before interest payments are less than the interest
payments.
c. It lacks the necessary liquidity to promptly pay its current
debt obligations.
d. The current ratio is less than 1.0.
10Monopoly Corp. is projecting sales of $12 million next year. All sales will be
on a credit basis. The present average collection period is 45 days. Monopoly
is considering a change in selling terms from net 30 days to 2/10, net 30 in
order to speed up the collections of its receivables. Studies indicate that one
half of the firm’s customers will take the discount. If Monopoly offers this
discount, how much will it cost next year? Assume a 365-day year.
a. $87,000
b. $98,000
c. $103,000
d. $112,000
e. $120,000
11Which of the following most likely would cause a lease to be classified as a
capital lease?
a. The lease is for five or more years.
b. The lease is for $1 million or more.
c. The lease permits the lessee to purchase the equipment at the
end of the lease for its fair market value.
d. The present value of the lease payments, calculated at the
lessee’s typical rate of interest for a similar purchase
loan, is more than the original purchase price of the
equipment.
12UVP preferred stock pays $5.00 in annual dividends per share. If your
required rate of return is 13%, how much will you be willing to pay for one share?
a. $38.46
b. $26.26
c. $65.46
d. $46.38
13Determine the dollar value of a three year annuity that would produce the
same NPV as the following project if the appropriate discount rate is 15%, and
initial outflow = 0.
Initial Outflow = $1,200
Cash Flow Year 1 = $800
Cash Flow Year 2 = $500
Cash Flow Year 3 = $700
a. $250.38
b. $673.94
c. $146.28
d. $430.82
14Sola Cola Corporation is undertaking a capital budgeting analysis. The
rate on 30-year U.S. Treasury bonds is 6.3%, and the return on the S&P 500
index is 18.5%. If the cost of Sola Cola’s retained earnings is 19.7%,
calculate its beta.
a. 1.1
b. 1.3
c. 1.5
d. 1.7
15Zybeck Corp. projects operating income of $4 million next year. The firm’s
income tax rate is 40%. Zybeck presently has 750,000 shares of common
stock outstanding which have a market value of $10 per share, no preferred
stock, and no debt. The firm is considering two alternatives to finance a new
product: (a) the issuance of $6 million of 10% bonds, or (b) the issuance of
60,000 new shares of common stock. If Zybeck issues common stock this
year, what will projected EPS be next year?
a. $2.10
b. $2.96
c. $2.33
d. $1.67
16In the event that Zoldt Corporation, which has a low P/E ratio, were to
acquire Sky Corporation, which has a higher P/E ratio, an analyst can be
certain that one of the following will occur.
a. Zoldt Corp. will see an immediate decrease in P/E.
b. Zoldt Corp. will see an immediate decrease in EPS.
c. Zoldt Corp. will see an immediate increase in the growth rate
of EPS.
d. Zoldt Corp. will see an immediate increase in EPS.
17Assume that an investor owned 5,000 of Chrysler Corporation common stock
prior to the purchase of Chrysler by Daimler-Benz of Germany. At the time
of the acquisition, the dollar was worth 1.7848 German marks. Further
assume that the purchase price was equal to 107.09 marks per share.
What was the sales price of Chrysler common stock per share in U.S.
dollars?
a. $50
b. $191
c. $107
d. $60
e. None of the above
18If a company’s average collection period is higher than the industry average,
then the company might be:
a. Enforcing credit conditions upon its customers which are too
stringent.
b. Allowing its customers too much time to pay their bills.
c. Too tough in collecting its accounts.
d. Too liquid.
19Kiosk Corp. has current assets of $4.5 million and current liabilities of $3.6
million. The current ratio is 1.25, and the quick ratio is 0.75. How much
does Kiosk have invested in inventory (in millions)?
a. $0.8
b. $1.8
c. $2.4
d. $2.9
e. $3.6
20A firm has a total asset turnover of 2, a net profit margin of 5%, and a debt
ratio of 50%. If the firm has a dividend payout ratio of 20%, calculate its
sustainable growth rate.
a. 14%
b. 16%
c. 18%
d. 20%
21If you have $20,000 in an account earning 8% annually, what constant amount
could you withdraw each year and have nothing remaining at the end of five
years?
a. $3,525.62
b. $5,008.76
c. $3,408.88
d. $2,465.78
22A firm has a degree of combined leverage of 1.25. Price per unit is $15 and
variable cost per unit is $5. Interest expense is $10,000 and fixed costs are
$190,000. Calculate the quantity of output produced.
a. 100,000 units
b. 120,500 units
c. 150,000 units
d. 200,000 units
23A stock currently sells for $63 per share, and the required return on the
stock is 10%. Assuming a growth rate of 5%, calculate the stock’s last
dividend paid. (Rounded)
a. $1
b. $3
c. $5
d. $7
24An optimal capital structure is achieved:
a. When a firm’s expected profits are maximized.
b. When a firm’s expected EPS are maximized.
c. When a firm’s expected stock price is maximized.
e. When a firm’s break-even point is achieved.
25An investor in the 40% tax bracket owning a tax-exempt bond yielding 6%
realizes an equivalent before-tax yield of:
a. 12%
b. 10%
c. 8%
d. 6%
1. d 2. d 3. d 4. c 5. b 6. b 7. b 8 b 9 d 10 e 11 a 12 b 13 b 14 a 15 b 16 b 17 c 18 b 19 b 20 b 21 c 22 b 23 d 24 c 24 b
Why can’t the rest of USA do this Social Security Alternative Already Working in Texas?
The personal retirement plan sketched out in President Bush’s State of the Union Address has been universally derided by Democrats as an unworkable privatization of the retirement program.
"As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers, and the best way to reach that goal is through voluntary personal retirement accounts," Bush said during the address Wednesday night.
"Here is how the idea works: Right now, a set portion of the money you earn is taken out of your paycheck to pay for the Social Security benefits of today’s retirees," Bush explained. "If you’re a younger worker, I believe you should be able to set aside part of that money in your own retirement account, so you can build a nest egg for your own future."
President Bush warned the nation that 13 years from now — in 2018 — Social Security will start paying out more than it takes in. He also had a message for Americans 55 and older: "Do not let anyone mislead you;" he said: "For you, the Social Security system will not change in any way. For younger workers, the Social Security system has serious problems that will grow worse with time."
Senate Minority Leader Harry Reid (D-Nev.) said on Wednesday that all 44 Senate Democrats were united against the president’s plan to reform Social Security. Without knowing any details, Reid told reporters, "President Bush should forget about privatizing Social Security," adding, "It will not happen."
But privatized Social Security has been a fact of life for municipal employees in Galveston County, Texas, for nearly a quarter century. Local government workers voted overwhelmingly in 1981 to opt-out of Social Security in favor of a locally controlled system that has since been widely described as a phenomenal success.
Under federal law at the time, municipal workers had the option of not participating in the Social Security program, replacing it with private retirement accounts. The private system is subject to regular payroll deductions and employer matches, essentially mirroring Social Security tax withholding and employer match provisions.
"There are a number of [county employees] that are strong advocates and say it’s really a very, very good, solid, strong, financially and fiscally strong program that is for the benefit of county employees far in excess of what Social Security would be," Galveston County Legal Department Director Harvey Bazaman told Cybercast News Service.
Under Galveston’s "Alternate Plan," the county withholds approximately six percent of each employee’s salary for retirement. That money, along with a partial match by the county, is invested in personal accounts for each participating employee. The remaining county match covers the cost of disability and life insurance policies for employees, which also pay benefits much higher than those offered by Social Security.
While the employee-employer funding formulas are nearly identical under both Social Security and the Galveston Alternate Plan, the results are very different.
The U.S. Treasury Bonds purchased with money from the Social Security "trust fund" pay approximately two percent. But for the period from 1982 through 1997 the rate of return on funds invested in the Galveston plan has averaged 8.6 percent, a return more than 400 percent greater than Social Security.
Data from First Financial Benefits, which administers the Galveston Alternate Plan, shows that county workers earning slightly more than $17,000 a year can retire at age 65 with a monthly payment of $1,285 compared with $782 a month under Social Security.
Due to having more money withheld and the effects of compounding interest, higher income employees in Galveston see even larger benefits under the Alternate Plan. Workers earning $51,263 a year could retire at 65 with a monthly benefit of $3,846, while the same worker participating in Social Security would receive $1,540 each month.
Even the relatively low "guaranteed rate of return" in the Galveston plan roughly doubles the rate of return for Social Security. Funds already invested in annuities have a guaranteed yield of 3.75 percent, according to Bazaman. As for money being placed into private accounts today, Bazaman said the rate is slightly higher at 4.24 percent.
"They have never lost money. They have gone through double recessions in the 1980s, recessions in the 90s, and a tech boom and bust in the 1990s and into 2000," said Charles Jarvis, chairman and CEO of USA Next-United Seniors. "They’ve gone through another recession, an attack on this country and wars in Afghanistan and Iraq, yet they have steadily provided income for people."
The Galveston County, Texas Alternate Plan enacted in 1981 with the approval of 78 percent of local employees proved popular locally. By 1983, local government workers in three nearby municipalities — Brazoria and Matagorda Counties, and Texas City — also voted to quit Social Security in favor of private retirement plans.
Amid growing enthusiasm for an alternative to Social Security, the Democrat-controlled Congress voted in 1983 to end the provisions giving municipal workers the option to leave the federal system.
The Social Security Administration estimates that, nationwide, seven million public employees opted out of the federal retirement plan before Congress eliminated that choice. Those employees’ combined annual incomes for 1999 totaled $129 billion. Based on that figure, and including estimated employer matching funds, those public employees invested approximately $17 billion in variations of private retirement accounts that year rather than in Social Security.
In testimony before the President’s Commission on Social Security in 2001, former Galveston County Judge Ray Holbrook relayed the story of a county commissioner who died in office.
According to Holbrook, the commissioner’s widow received a $255 death benefit from Social Security. But under the Galveston Alternate Plan, she also received a lump-sum survivor’s benefit of $150,000 and was entitled to her late-husband’s $125,000 reserve account.
Holbrook’s anecdote underscores another aspect touted by backers of private accounts — that the money paid into them is the private property of the employee. As a result, private retirement account funds are passed on to an employee’s heirs upon his or her death, unlike unpaid Social Security benefits, which are forfeited to the government.
the hole reason is if you put the money back to the people the the congress loses the power.
Stock Investing Tutorial #7 Part 2
More info for investors who are looking at stocks and more types of investing opportunities. This video two parter is aimed mainly at high school age people who might have a future interest in investment opportunities that are not discussed in most financial groups or classes. Wealth is not a number, it is a feeling. You are required to manage your investment decisions. This video shows many different arenas which can produce income, but each requires the investor to do research. Some areas to consider are stocks, mutual funds, bonds, commodities, franchises, royalty income, residual income, real estate, collectibles, tools of your trade and annuities which are not mentioned in this video.
Duration : 0:8:14
Finance – Standard Deviants Trailer
Recommended by university professors and teachers nationwide, The Standard Deviants are the perfect resource for academic success. The Standard Deviants entertaining and enjoyable teaching style breaks down difficult subjects into a clear, step-by-step format. Make sense of the stock pages as they learn how money moves through the market. This series explains: annuities, interest rates, portfolios, bond valuation, Internal Rate of Review, and much more!
http://www.cerebellum.com
Duration : 0:1:22
EH – Financial Planning: Annuities : Why Invest in Annuities?
Annuities are invested by insurance companies under government guidelines. Invest in annuities with tips from a registered financial consultant in this free financial planning video.
Expert: Patrick Munro
Contact: www.northstarnavigator.com
Bio: Patrick Munro is a registered financial consultant (RFC) with outstanding sales volume of progressive financial products and solutions to the senior and boomer marketplace.
Filmmaker: Reel Media LLC
Duration : 0:1:12
HamiltonAnnuitiesWF.wmv
How annuities work and how Hamilton annuities compare to Wells Fargo
Duration : 0:1:21