1. Eight years from today, Mrs. Luna will retire. At that time, Mrs. Luna will receive a severance pay of 600 million. Instead of receiving severance pay, Mrs. Luna agrees to receive 100 million now, 200 million in the fifth year from now, and X million ten years from now. If the interest rate is compounded at 8% every 6 months, what is the value of X? (Hint: Use the compound interest present value (initial savings) formula).

1. Eight years from today, Mrs. Luna will retire. At that time, Mrs. Luna will receive a severance pay of 600 million. Instead of receiving severance pay, Mrs. Luna agrees to receive 100 million now, 200 million in the fifth year from now, and X million ten years from now. If the interest rate is compounded at 8% every 6 months, what is the value of X? (Hint: Use the compound interest present value (initial savings) formula).

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You wish to save P2,500,000 for your retirement by saving a certain sum every month for the next 40 years. If you can earn 9% compounded monthly, and you make your deposits at the beginning of each month, how much would you have to deposit each month to achieve your objective? a. P616.59b. P534.04c. P565.67d. P530.06e. None of the above
7. You graduate from the Trobe University on your 25th birthday and you immediately find a job with a starting salary of $80,000 per year. You decide to put away 10% of your annual salary for your retirement, via endofyear deposits. Assume for this question that your salary never changes. If you retire on your 65th birthday (making your first deposit on your 26th birthday and your last deposit on your 65th birthday) and the interest rate is 7% p.a how much will you have saved when you retire?
4. The amount that must be set aside today to enable annual payments of $40,000 each for 5 years, beginning at the end of the first year. The annual interest rate is 6%. 5. The amount one would have in a retirement account if they deposit $3,500 per year beginning immediately, for a total of 30 years. The annual interest is 5%. 6. The amount one would have in a retirement account if they deposit $2,300 per year beginning at the end of the first year, for a total of 30 years. The annual interest is 5%.
You have been told that you need $15,000 today in order to have $50,000 you want when you retire 30 years from now. What rate of interest was used in the present value computation? Assume interest is compounded annually. Can the calculator and excel solution be provided?
Assume that you contribute $280 per month to a retirement plan for 25 years. Then you are able to increase the contribution to $480 per month for the next 25 years. Given a 7.2 percent interest rate, what is the value of your retirement plan after the 50 years? Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
Your retiring will be in 2036. You need to invest some money so that you can earn 10,000 per year for the next 20 years. If the rate of interest is 8% compounded annually, what is the amount of the current investment? $98,181 $90,181 $88,181 $80,181
A person borrows an amount for a new house and s/he is going to make monthly payments of 8,000 $ for the next 10 years. The nominal annual interest rate is quoted as 12%. (Assume the first instalment is going to be paid 1 month after s/he borrows.) a. Find the amount borrowed by this person. b. How much does this credit worth at the end of the last payment date? c.lf this person decides on closing his/her loan after paying the 34th instalment, how much should s/he pay? It is given that the closing fee of this credit is 1,453 $.
Let us assume that Paulie will receive a one-time payment of $56,000 seven years from now. Assuming the interest rate of 10.2% a year, what's the present value of the $56,000 that will be received? $27,136.24 $29,363.24 O $28,373.76 O $25,326.23
(b) If Ms Chan is thinking of putting RM10,000 into the saving accounts at the end of each year for 10 years, what sum can she accumulate at an interest rate of 8% interest computed on a yearly basis?
If Alvin invest 5500 to day in a saving account. The money will grow to 8500 at the end of the year 4. Assuming that the interest is paid once per year, the effective annual rate of the invent is a. 12.2 b. 12.9 c. 11.5 d. 13.6 E. 10.8
1.1) For $20,000, you can purchase a five-year annuity that will pay $5000 per year for five years. The payments occur at the end of each year. a) Calculate the effective annual interest rate implied by this arrangement. 1.2) If you invest $1000 at 11% APR for five years, how much would you have at the end of 5 years? a) Calculate using simple interest. b) Calculate using compound interest.
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