3-43. An annuity fund is to be created to provide $6,000 at the end of each quarter year from ages 65 through 90 beginning at the end of the first quarter after age 65. Quarterly deposits are to be made to an account paying 8% per year compounded quarterly. These deposits will be stopped at age 65. (a) How much should each quarterly deposit be if the person is now 25 years old? (b) How much should the deposits be if the person is now 40 years old?

3-43. An annuity fund is to be created to provide $6,000 at the end of each quarter year from ages 65 through 90 beginning at the end of the first quarter after age 65. Quarterly deposits are to be made to an account paying 8% per year compounded quarterly. These deposits will be stopped at age 65. (a) How much should each quarterly deposit be if the person is now 25 years old? (b) How much should the deposits be if the person is now 40 years old?

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

See similar textbooks

Similar questions

4. The amount that must be set aside today to enable annual payments of $40,000 each for 5 years, beginning at the end of the first year. The annual interest rate is 6%. 5. The amount one would have in a retirement account if they deposit $3,500 per year beginning immediately, for a total of 30 years. The annual interest is 5%. 6. The amount one would have in a retirement account if they deposit $2,300 per year beginning at the end of the first year, for a total of 30 years. The annual interest is 5%.
Determine the amount of the ordinary annuity at the end of the given period. (Round your final answer to two decimal places.) $800 deposited semiannually at 6.6% for 10 years.
Georgia deposits $4,000 every three months for five years. The first deposit is made on March 31, 2016, and the last deposit is made on December 31, 2020. The fund earns 16% and interest is compounded quarterly. How much money will Georgia have on December 31, 2020, immediately after her last deposit? Factors for future value of an annuity of $1 are $123,876 $110,034 $119,112 $107,508
Ques 15 and 16
Question At the beginning of each month, $400 is deposited into a scholarship fund. The fund earns 5% annual interest, compounded monthly, and paid into the account at the end of the month. How much is in the account if deposits are made for 6 years? (Round your answer to the nearest cent if necessary.)
On January 1, 2018, you deposited $5,500 in a savings account. The account will earn 8 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 7 years? 2. What is the total interest for the 7 years? 3. How much interest revenue did the fund earn in 2018 and in 2019? Show Transcribed Text
Computing the Future Value of an Annuity Stone will deposit $8,250 at the beginning of each year for 10 years in a fund that earns 5%, compounded annually. What is the total amount of the fund at the end of 10 years? Round your answer to the nearest whole number. Do not use a negative sign with your answer. $ Answer
How much can be paid in scholarship at the beginning of each month if $231,500 is deposited in a trust fund if interest is 5.6% compounded monthly?
Question 1 a. Explain why it is important to have diversification in a portfolio. b. The following table represents a portfolio of two (2) assets: State of Probability of Return of Return of Nature State of Stock Stock B Nature under under Different Different State of State of Nature Nature Вoom 0.3 20% 25% Normal 0.5 10% 20% Recession 0.2 5% 10% i. What is the expected return on Stock A and Stock B? ii. What is the standard deviation of returns of Stock A and Stock B? iii. Which Stock is more volatile? c. Suppose you use J$100 000 to construct a portfolio comprising of Stock A and stock B, such that you invest J$30 000 and J $70 000 in Stock A and Stock B respectively. Also you have done some research and estimated the Beta (B) of the Stocks to be: Stock A=0.75 and Stock B=0.50. Use the expected returns calculated for each stock in (b), above to calculate the following: i. The expected return on the portfolio ii. Calculate the expected beta of the portfolio. , iii. Explain briefly how…
Determine the amount of the ordinary annuity at the end of the given period. (Round your final answer to two decimal places.) $500 deposited annually at 5.4% for 8 years
blem #1: $10,000 is used to purchase an appropriate size annuity that has level annual payments for 18 years. The price of the annuity is based on an effective annual rate of 11.2%. As each payment is received, it is put into a fund that earns an effective annual rate of 7%. (a) Determine the accumulated value of the investment at the end of 18 years. (b) If the $10,000 were put into a fund that was to produce the same final value after 18 years, what annual effective rate would that fund have to offer?
How much can be paid in scholarship at the beginning of each month if $238,500 is deposited in a trust fund if interest is 4.6% compounded monthly?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS