1. Phil Nelson anticipates he will need approximately $227,000 in 11 years to cover his daughter'scollege bills for a 4-year degree.How much would he have to invest today, at an interest rate of 10 percent compoundedsemiannually?2. Jennifer deposited $54,000 at Bank of America at 20% interest compounded quarterly. a) Whatis the effective rate (APY)? b) What will Jennifer's balance be in a year?a) APY (rounded to nearest tenth)b) Balance in one year3. Crystal deposited $16,000 in a new savings account at 7% interest compounded semiannually. Atthe beginning of year 4, Crystal deposits an additional $41,000 at 7% interest compoundedsemiannually.At the end of 6 years, what is the balance in Crystal's account?

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1. Phil Nelson anticipates he will need approximately $227,000 in 11 years to cover his daughter's college bills for a 4-year degree. How much would he have to invest today, at an interest rate of 10 percent compounded semiannually?

1. Phil Nelson anticipates he will need approximately $227,000 in 11 years to cover his daughter's college bills for a 4-year degree. How much would he have to invest today, at an interest rate of 10 percent compounded semiannually?

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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Question

1. Phil Nelson anticipates he will need approximately $227,000 in 11 years to cover his daughter's
college bills for a 4-year degree.
How much would he have to invest today, at an interest rate of 10 percent compounded
semiannually?
2. Jennifer deposited $54,000 at Bank of America at 20% interest compounded quarterly. a) What
is the effective rate (APY)? b) What will Jennifer's balance be in a year?
a) APY (rounded to nearest tenth)
b) Balance in one year
3. Crystal deposited $16,000 in a new savings account at 7% interest compounded semiannually. At
the beginning of year 4, Crystal deposits an additional $41,000 at 7% interest compounded
semiannually.
At the end of 6 years, what is the balance in Crystal's account?

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