5.1000 is deposited into Fund X, which earns an annual effective rate of 6%. At the end of eachyear, the interest earned plus an additional 100 is withdrawn from the fund. At the end of thetenth year, the fund is depleted.The annual withdrawals of interest and principal are deposited into Fund Y, which earns anannual effective rate of 9%.Calculate the accumulated value of Fund Y at the end of year 10.(A) 1519(B) 1819(C) 2085(D)2273(E)2431

Here,DepositAmount is $1,000Annual Effective Rate of Fund X is 6%Withdrawal is Interest plus…

Answered: 1000 is deposited into Fund X, which…

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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Similar questions

Using the information that the Amount of $1 per annum for 8 years at 5% is 9.5491, calculate the Annual Sinking Fund (ASF) $1 for 8 years at 59%. 0.0544 0.0994 0.0873 0.1047
On a loan of $1400, interest at 9% effective must be paid at the end of each year. The borrower also deposits $X at the beginning of each year into a sinking fund earning 4.7% effective. At the end of 10 years the sinking fund is exactly sufficient to pay off the loan. Calculate X. A. $ 1617.11 B. $ 1078.07 C. $ 1347.59 D. $ 1724.92 E. $ 1232.09
(1) A 10-year loan of 30,000 may be repaid under the following two methods: (a) amortization method with equal annual payments at an annual effective interest rate of 7.5%. (b) sinking fund method in which the lender receives an annual effective interest rate of 9% and the sinking fund earns an annual effective interest rate of j. Both methods require a payment of X to be made at the end of each year for 10-years. Calculate j. (2) A loan of X is repaid with level annual payments at the end of each year for 15 years. You are given: (a) The interest paid in the 1st year is 1000; and (b) the principal repaid in the 10th year is 563. Calculate X.
If $1000 is deposited at the end of each year for 5 years into an ordinary annuity earning 8.99% compounded annually, construct a balance sheet showing the interest earned during each year and the balance at the end of each year. Complete the balance sheet. Period Amount Interest Balance 1 $1000.00 2 $1000.00 3 $1000.00 4 $1000.00 $ $4 $1000.00 $4 $ (Round to the nearest cent as needed.)
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An amount of $1,000 is deposited in an account that carries a rate of 8% compounded semi- annually. What will be the balance in the account at the end of 5 years? A. $12,006.11 В. $1,469.33 C. $1,216.65 D. $1,480.24
Using the appropriate PV table, compute the present value of the following amounts: a. $24,000 payable at the end of each year for 5 years with 12% interest compounded annually.b. $16,000 receivable at the beginning of each semiannual period for 20 years with 10% interest compounded semiannually.c. $3,000 payable at the beginning of the seventh, eighth, and ninth years at 3% compounded annually.
are ? k of &, Deposits of $100 are made at the end of each calendar year from 2014 through 2019 inclusive. The resulting fund is to be used to buy a perpetuity with annual payments following the pattern X, 4X, 7X, 10X,... with the first payment on December 31, 2021. If the anmual effective rate of interest is 5%, find X. A. 0.558 B. 0.567 C. 0.576 D. 0.585 E. 0.594
What endowment is required to establish a perpetuity with an ongoing cost of $6,000 atthe end of each month if interest is 6.0% compounded annually in perpetuity?A. $1,325,562.62B. $1,232,652.72C. $1,365,256,24D. $1,562,897.26
For a sum of money interetsed at 4% compunded semi- annually for 5 years. a) nominal rate of interest b) the periods rate of interest c) the compunding factors d) the numerical value of compounding factors
17. Determine the payment to amortize the debt. (Round your answer to the nearest cent.) Monthly payments on $110,000 at 5% for 25 years. 18. Determine the payment to amortize the debt. (Round your answer to the nearest cent.) Quarterly payments on $17,500 at 3.9% for 6 years.
The future value of $7,000 deposited today and compounded semiannually at an 9% annual interest rate for four years is a.$9,955. b.$9,520. c.$8,100. d.$7,920

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