Answered: 2. If you invest P25,000 at 8% interest…

2. If you invest P25,000 at 8% interest compounded annually, approximately how much money will be in the account at the end of 10 years? a. P31,000 b. P46,000 c. P54,000 d. P75,000

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

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Question

If you invest P25,000 at 8% interest compounded annually, approximately how much money will be in
the account at the end of 10 years?
a. P31,000
b. P46,000
c. P54,000
d. P75,000
3. A John wants to surprise his mother with a gift for her birthday, which is five vears away. He
2.

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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
K (Comprehensive problem) You would like to have $54,000 in 16 years. To accumulate this amount, you plan to deposit an equal sum in the bank each year that will earn 6 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 6 percent on this deposit.) c. At the end of five years, you will receive $15,000 and deposit this in the bank toward your goal of $54,000 at the end of year 16. In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Again, assume you can earn 6 percent on your deposits.) a. How much must you deposit annually to accumulate this amount? $ 2103.42 (Round to the nearest cent.) b. If you decide to make a large lump-sum deposit today instead of…
3. If you were to deposit $399.27 into an account today that pays 8% interest annually, with a payment of $100 at the end of each year, what would you be left with at the end of 5 years? in excel
12. If you borrowed P 10,000.00 from a bank with 8% interest per annum, what is the total amount to be repaid at the end of one year?
Calculate the future value of $8,000 in a. 9 years at an interest rate of 9% per year. b. 18 years at an interest rate of 9% per year. c. 9 years at an interest rate of 18% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)?
Suppose you wish to have $17,250 in 5 years. Use the present value formula to find how much you should invest now at 5% interest, compounded semiannually in order to have $17,250, 5 years from now. Then calculate the amount of interest. O $3,774.33 $4,312.50 $12,937.50 $13,475.67
3. 4. How much interest on interest is earned in an account by the end of 5 years if $100,000 is deposited and interest is 4% per year, compounded continuously? How much will be in an account at the end of five years the amount deposited today is $10,000 and interest is 8% per year, compounded semi-annually? Complete the following, solving for the present value, PV: Case A B C Future value $10,000 $563,000 $5,000 Interest Number of rate periods 5% 5 4% 5.5% 20 3 Present value
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If $10,000 is invested in a certain business at the start of the year, the investor will receive $3,000 at the end of each of the next four years. What is the present value of this business opportunity if the interest rate is 4% per year? A. $1,068 B. $890 C. $445 D. $1424
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4f

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