2) You set up a 45-year investment plan with the intention of amassing 1,500,000 at the end of the 45 years. Assume an average return of 7% per year. a) Set up an IVP that describes the progress of the 45-year investment plan. (You will be putting in a fixed payment each month) b) What should be your monthly payment over the 45-years to ensure your investment plan reaches 1,500,000? c) What should your monthly payment be if you were to start an investment plan reaching the same $1,500,000 over 20 years?

2) You set up a 45-year investment plan with the intention of amassing 1,500,000 at the end of the 45 years. Assume an average return of 7% per year. a) Set up an IVP that describes the progress of the 45-year investment plan. (You will be putting in a fixed payment each month) b) What should be your monthly payment over the 45-years to ensure your investment plan reaches 1,500,000? c) What should your monthly payment be if you were to start an investment plan reaching the same $1,500,000 over 20 years?

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

You have your choice of two investment accounts. Investment A is a 9-year annuity that features end-of-month $2,800 payments and has an APR of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 9 percent, also good for 9 years. How much money would you need to invest in B today for it to be worth as much as Investment A 9 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
What is the present value of annual payments of $1,500 per year, at a discount rate of 10%, if the first regular annual annuity payment is received 3 years from today and continues for 15 years? Assume annual compounding.
you put $200 per month in an investment plan that pays an APR of 2.5% How many will you have after 28 years? Compare this amount to the total deposits made over the time period. After 28 years the investment plan will contain
What is the maximum amount you should pay today for an investment that pays a single future cash flow of $25,000 in 5 years if the appropriate interest rate is 2% compounded semiannually?
Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $200 per month for 20 years, if the account earns 2% per year
Wells Fargo offers a new savings product: You make the following payments over the next 5 years and will then receive a lump sum payment 25 years from now. Year Payment 1 300 2 400 3 500 4 600 5 700 The annual interest rate is 7% for the next 5 years, then 2% for the following 20 years. What is the future value of your investment in year 25?
Find the future value if $7000 is invested for 6 years at 11% compounded annually. (Round your answer to the nearest cent.) $ Need Help? DETAILS MY NOTES What is the future value if $8200 is invested for 15 years at 10% compounded semiannually? (Round your answer to the nearest cent.) Need Help? Read It ASK W
Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume end-of-period withdrawals and compounding at the same intervals as withdrawals. Round your answer to the nearest cent.) $300 per month for 10 years, if the account earns 2% per year and if there is to be $10,000 left in the annuity at the end of the 10 years PV = $
To supplement your planned retirement in exactly 30 years, you estimate that you need to accumulate $1 million by the end of 30 years from today. You plan to make equal annual end-of-year deposits into an account paying 4 percent annual interest. a. How large must the annual deposits be to create the $1 million amount by the end of 30 years? b. If you can afford to deposit only $5,000 per year into the account, how much will you have accumulated by the end of the 30 years?
A company wants to have $30,000 at the beginning of each 6-month period for the next 4 1/2 years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.42%, compounded semiannually? (b) Solve the problem. (Round your answer to the nearest cent.)$ _____
A loan of 2000 is taken now and is agreed to be repaid as follows: annual payments of 200 each for as long as possible and a final payment of 200+ X where X < 200; the first payment is due 10 years from now. The effective annual rate is 4%. a) How many payments of 200 are made? b) What is the amount of the final payment?
You are looking at two investment options, A and B. Investment A is a 15-year annuity that needs an end-of-month payment of $1,100 and has an APR of 9% compounded monthly. Investment B is also a 15-year investment, but a lump sum investment that has as an APR of 8% compounded daily. How much money do you need to invest in B today as a single lump sum amount if you wish to have the same wealth as in Investment A in 15 years? If Investment B, with 8% APR compounded daily, gave you the option of investing a constant amount at the end of every six months, what would this amount be in order to give you the same wealth as in A at the end of 15 years?

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