1)Using an interest rate of $4.5% compounded monthly, how much does a company need to deposit now, such that they have the ability to withdaw $5,000 at the start of each quarter and have $50,000 left over in 15 years? 2)Given an interest rate of 2.8% compounded quarterly, what amount is required to be deposited today along with semi-annual contributions of $2,500 such that the cumulative balance in 15 years is $250,000?
1)Using an interest rate of $4.5% compounded monthly, how much does a company need to deposit now, such that they have the ability to withdaw $5,000 at the start of each quarter and have $50,000 left over in 15 years? 2)Given an interest rate of 2.8% compounded quarterly, what amount is required to be deposited today along with semi-annual contributions of $2,500 such that the cumulative balance in 15 years is $250,000?
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
Related questions
Question
1)Using an interest rate of $4.5% compounded monthly, how much does a company need to deposit now,
such that they have the ability to withdaw $5,000 at the start of each quarter and have $50,000 left over in
15 years?
2)Given an interest rate of 2.8% compounded quarterly, what amount is required to be deposited today
along with semi-annual contributions of $2,500 such that the cumulative balance in 15 years is $250,000?
For example $12,345.67
Answer:
A contract between two parties (company A & B) was created such that in return for equipment
A would prou
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