6.10 Future value of an ordinary annuity: Cecelia Thomas is a sales executive at a Baltimore firm. She is 25 years old and plans to invest $3,000 every year in an IRA account, beginning at the end of this year until she reaches age 65. If the IRA investment will earn 9.75 percent annually, how much will she have in 40 years, when she turns 65? 6.11 Future value of an annuity due: Refer to Problem 6.10. If Cecelia invests at the beginning of each year, how much will she have at age 65?
6.10 Future value of an ordinary annuity: Cecelia Thomas is a sales executive at a Baltimore firm. She is 25 years old and plans to invest $3,000 every year in an IRA account, beginning at the end of this year until she reaches age 65. If the IRA investment will earn 9.75 percent annually, how much will she have in 40 years, when she turns 65? 6.11 Future value of an annuity due: Refer to Problem 6.10. If Cecelia invests at the beginning of each year, how much will she have at age 65?
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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I need the answers to 6.10 and 6,11.
Transcribed Image Text:6.9 Future value of an ordinary annuity: Robert Hobbes plans to invest $25,000 a year at the
end of each year for the next seven years in an investment that will pay him a rate of return of 11.4
percent. How much money will Robert have at the end of seven years?
6.10 Future value of an ordinary annuity: Cecelia Thomas is a sales executive at a Baltimore
firm. She is 25 years old and plans to invest $3,000 every year in an IRA account, beginning at the
end of this year until she reaches age 65. If the IRA investment will earn 9.75 percent annually,
how much will she have in 40 years, when she turns 65?
6.11 Future value of an annuity due: Refer to Problem 6.10. If Cecelia invests at the beginning of
each year, how much will she have at age 65?
6.12 Computing annuity payment: Kevin Winthrop is saving for an Australian vacation in three
years. He estimates that he will need $5,000 to cover his airfare and all other expenses for a week-
long holiday in Australia. If he can invest his money in an S&P 500 equity index fund that is
expected to earn an average annual return of 10.3 percent over the next three years, how much
will he have to save every vear if he starts saving at the end of this vear?
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