Future Payment

Which Of The Following Changes Would Decrease The Present...

New postby Marilou » 22 Oct 2012, 20:50

Which of the following changes would decrease the present value of a future payment?

A) a decrease in the size of the payment
b) an increase in the time until the payment is made
c) an increase in the interest rate
d) all of the above are correct
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New postby Tennie » 22 Oct 2012, 20:50

Answer: d) all of the above are correct

Reasons:

a) is correct because clearly if the raw size of the payment is reduced, both the present and future value would be lower

b) is correct because the longer you wait to receive the same amount of payment, the less it is worth to you (lower present value)

c) is correct because the present value of the payment is inversely proportional to the interest or discount rate. So an increase in interest rate leads to a decrease in present value.

Hence, the answer is d) all of the above are correct
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An increase in the time to the promised future payment...

New postby Tiesha » 22 Oct 2012, 20:50

An increase in the time to the promised future payment ________ the present value of the payment.?

An increase in the time to the promised future payment ________ the present value of the payment.

A) decreases
B) increases
C) has no effect on
D) is irrelevant to
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New postby Patrina » 22 Oct 2012, 20:50

I really like that the first poster thought about inflation. Elegant thought process.

They didn't take into account the opportunity cost of the money. In other words if I get the money today, I can invest it and make more with it over time. So I would have to say that in almost all cases the present value of the payment decreases with an increase in the time to the promised future payment.

Oh and there may risk associated with waiting longer for payment and that isn't accounted for either.
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After taxes on my bonus, what vehicle will allow me to...

New postby Nicolle » 22 Oct 2012, 20:50

After taxes on my bonus, what vehicle will allow me to stash remainder 4 a home down payment in the future?

I am a single professional with income over $100 K (28% tax rate) & receiving a bonus payout this year. After paying taxes on my bonus, I want to be able to save the remainder in some vehicle for future down payment on my first home (possibly 6-9 months down the road) without incurring a larger tax penalty. Would a Roth or Coverdell IRA help me? Or is there another vehicle better suited for my purposes?
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New postby Ramon » 22 Oct 2012, 20:50

I'm sorry, but you won't qualify for a Roth:
"Available only to single-filers making up to $95,000 or married couples making a combined maximum of $150,000 annually. "
http://beginnersinvest.about.com/cs/rot ... othira.htm
The Coverdell is an EDUCATIONAL fund IRA for someone who is under 18 when it's established.
As you're talking about a fairly short space of time to access the funds, probably either a money market fund or a short-term CD make the most sense for you.

Check rates and get info here:
MMAs
http://www.bankrate.com/brm/rate/chk_sav_home.asp
CDs
http://www.bankrate.com/brm/rate/deposits_home.asp
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Can you make payments on a loan before the due date? What...

New postby Franchesca » 22 Oct 2012, 20:50

Can you make payments on a loan before the due date? What if you miss a payment in the future?

A car loan balance of $10,000. I paid $5500 on the loan. Two months later, I was unable to make a payment. Shouldn't the $5500 cover me if I'm late two months later? I should at least be paid up for the next 12 months, right?
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New postby Adrianna » 22 Oct 2012, 20:50

I have found that it depends on the loan. I have had loans that I paid extra on the monthly payment and ultimately found I had several months of no required payment as they had applied the extra payments to future payments, but I have had loans also that simply applied any extra payments towards the principal if the loan. The best thing to do is to contact the compnay who holds the loan and ask them.
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How to work out a cash payment plan for my future...

New postby Modesta » 22 Oct 2012, 20:50

How to work out a cash payment plan for my future pregnancy? Any Ohio programs other than medicaid?

I have insurance but it only covers me if I have complications during my pregnancy. I believe my doctor takes medicare etc (we make too much for that) so I figure we are going to have to pay out of pocket. Are there any ohio programs for cost assistance associated with pregnancy? I heard you can speak to the doctor and tell them that you're paying cash for everything and they will give you a discounted price for everything from beginning to end. Is this true? Any advise would be appreciated!
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New postby Adriane » 22 Oct 2012, 20:50

I applaud you for wanting to take the responsibility for your medical coverage. It seems by reading the questions that the first word out of many peoples mouth is medicaid.
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Is one person's IRA assignable to another for future...

New postby Delmy » 22 Oct 2012, 20:50

Is one person's IRA assignable to another for future payment of a current debt? Is one person's IRA assignable to another for future payment of a current debt?
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New postby Peggy » 22 Oct 2012, 20:50

No. The person holding the IRA can withdraw money anytime he wants. Before age 59 1/2, he can withdraw but has to pay a penalty.
An IRA holder can designate a beneficiary, but any money in the fund is transferable only after the IRA holder's death.
If someone is trying to use IRA as collateral on a loan, he cannot.
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In PA if a tenant is evicted from his/her apartment can...

New postby Franchesca » 22 Oct 2012, 20:50

In PA if a tenant is evicted from his/her apartment can the landlord require payment for future rent?

The question is pretty much what I said. If you are in the state of pennsylvania and youa re evicted from your apartment for unpaid rent can the landlord then charge you for the back rent plus all rent until the end of the lease. IE: You are evicted in Feb and you lease ends in july and you must pay rent for the months before feb AND March-July even though you dont live there.

Thanks!
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New postby Kelley » 22 Oct 2012, 20:50

Well the answer is this. If you are evicted he must then file in court for the unpaid rent in which you were evicted for, but he also must take out your security deposit. if he trys to file for future rent at that time the judge will not allow it. but doesn;t mean your off the hook. You are obligated to pay rent on an apartment until it is rented. but the landlord can not just let it sit vacant.

i wouldn;t pay, because nine times out of ten he isn;t going to file on you twice. and most cases they don;t when, because judge doen;t understand how an apartment can stay vacant for that long. he will pull all your chains to get it, they try an scare you into it. but you don;t have to pay unless he files and the judge says OK
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If my mortgage company files for bankruptcy, where do I...

New postby Milagros » 22 Oct 2012, 20:50

If my mortgage company files for bankruptcy, where do I make my mortgage payment in the future? If my mortgage company files for bankruptcy, where do I make my mortgage payment in the future?
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New postby Shanon » 22 Oct 2012, 20:50

Your mortgage will be picked up by someone else. They'll advise you where to send your payments.

Mortgages are frequently traded on the financial markets, individually or in blocks. It's not unusual to have your mortgage sold to several different investors over the years. When it happens you'll receive a letter advising you of the new mailing address.

Additionally, mortgages are often serviced by dedicated mortgage servicing companies. It's possible that the new holder of your mortgage may use the same servicing company so the mailing address wouldn't change at all.
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