5) You need $10,000 annually for 4 years to complete your education, starting next year. (One year from today you would withdraw the first $10,000.) Your uncle will deposit an amount today in a bank paying 5 percent annual interest, which would provide the needed $10,000 payments. How large must the deposit be? Answer must be rounded at 2 decimals
5) You need $10,000 annually for 4 years to complete your education, starting next year. (One year from today you would withdraw the first $10,000.) Your uncle will deposit an amount today in a bank paying 5 percent annual interest, which would provide the needed $10,000 payments. How large must the deposit be? Answer must be rounded at 2 decimals
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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Transcribed Image Text:5) You need $10,000 annually for 4 years to complete your education, starting next year. (One year (1
from today you would withdraw the first $10,000.) Your uncle will deposit an amount today in a
bank paying 5 percent annual interest, which would provide the needed $10,000 payments.
How large must the deposit be?
Answer must be rounded at 2 decimals
6) An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4,
$300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8
(10
percent annually,
al risk earn 8
a. What is its present value?
b. Its future value?
Answer must be rounded at 2 decimals
a.
b.
Transcribed Image Text:5) You need $10,000 annually for 4 years to complete your education, starting next year. (One year (1
from today you would withdraw the first $10,000.) Your uncle will deposit an amount today in a
bank paying 5 percent annual interest, which would provide the needed $10,000 payments.
How large must the deposit be?
Answer must be rounded at 2 decimals
6) An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4,
(10
$300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8
percent annually,
athe
of equal risk earn 8
a. What is its present value?
b. Its future value?
Answer must be rounded at 2 decimals
a.
b.
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