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Assume that your hotel wants to have $1,000,000 in 12 years.
Your hotel wants to start investing today in an account that pays compound interest, but does not know how much it needs to invest.
Determine the amount of money your hotel needs to invest today at a quarterly rate of interest of 1% ($).
Step by step
Solved in 4 steps
- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?Use Excel to answer the following questions. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?Assume you borrow $200,000 from a bank today to buy a house at 4% interest for 30 years with monthly payments. How much will the monthly payment be? How much interest will you pay over the course of the loan? How much equity do you have in the house after 6 years? What will the loan balance be at the end of year 20? How much interest paid during year 5?
- You just opened a brokerage account, depositing $4,000. You expect the account to earn an interest rate of 10.2%. You also plan on depositing $1,500 at the end of years 5 through 10. What will be the value of the account at the end of 20 years, assuming you earn your expected rate of return?Suppose you take out a $117,000, 20-year mortgage loan to buy a condo. The interest rate on the loan is 5%. To keep things simple, we will assume you make payments on the loan annually at the end of each year. a. What is your annual payment on the loan? b. Construct a mortgage amortization. c. What fraction of your initial loan payment is interest? d. What fraction of your initial loan payment is amortization? e. What is the total of the loan amount paid off after 10 years (halfway through the life of the loan)? f. If the inflation rate is 3%, what is the real value of the first (year-end) payment? g. If the inflation rate is 3%, what is the real value of the last (year-end) payment? h. Now assume the inflation rate is 6% and the real interest rate on the loan is unchanged. What must be the new nominal interest rate? i-1. Recompute the amortization table. i-2. What is the real value of the first (year-end) payment in this high-inflation scenario? j. What is the real value of the last…What is the excel function and formula for this question? Off-The-Books Investment Firm, LLC, has offered you an investment it says will return to you $20,000 in 2 years. To get in, you'll need to make a $10,000 deposit to their receivables account and promise not to tell anyone about it. What is the annual return on this investment?
- Assume that you plan to buy a condo 5 years from now and you need to save for a down payment. You plan to save 2, 500 per year (with the first deposit made immediately), and you will deposit the funds in a bank account that pays 4% interest. How much will you have after 5 years? How much will you have if you make the deposits at the end of each year?You want to invest $24,000 and are looking for safe investment options. Your bank is offering you a certificate of deposit that pays a nominal rate of 6% that is compounded quarterly. What is the effective rate of return that you will earn from this investment?An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?
- You are looking to invest in a real-estate property to rent out that will cost $100,000. The property is expected to produce annual rent cash flows of $9,000 in Year 1, $7,400 in Year 2, and $8,800 in Year 3, at which point you will sell the property for $91,000.00, if your bank quotes you a mortgage rate of 5.25% per year what is the dollar return you can expect on your investment? Additionally, should you buy the property? a. 2,911.06, do not buy the property b. -$787.99 buy the property c. 787.99, buy the property d. -2,911.06, buy the propertyYour brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 4.25 percent with the interest being paid quarterly. What will be the value of the investment in two years? wut ofWhen you buy a certificate of deposit (CD), you are investing your money in an account that earns interest for a specific period of time. A CD matures when it has been invested for the required amount of time. Assume that you have $2300 to invest in a 5-year CD with an APR of 3% compounded daily. When the CD matures, how much interest will you have earned? Round your result to the nearest cent. $