A company just decided to save 5500 a month for the next eight years as a safety net for recessionary. The money will be set aside in a separate saving account which pays 4.5% interest compounded monthly. The first deposit will be made today. What would today's deposit amount have to be if the firm up for one lump sum deposit today that will yield the same amount of receiving as the monthly deposit after eight years

A company just decided to save 5500 a month for the next eight years as a safety net for recessionary. The money will be set aside in a separate saving account which pays 4.5% interest compounded monthly. The first deposit will be made today. What would today's deposit amount have to be if the firm up for one lump sum deposit today that will yield the same amount of receiving as the monthly deposit after eight 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

An ambitious saver plans to deposit $1,00O0 in a bank account starting 1 quarter from now and wants to increase the deposits by $100 each quarter for the next five (5) years. Assuming the deposits earn 8% compounded quarterly, determine how much money will have deposited in yhe bank account at the end of five years.
You currently have $5,000. First United Bank will pay you an annual interest rate of 8.1, while Second National Bank will pay you an annual interest rate of 9.2. How many fewer years must you wait for your account value to grow to $10,300 at Second National Bank?
Suppose you invest $200 a month for 6 years into an account earning 9% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 20 years. How much will you have in the end? $ Suppose instead you didn't invest anything for the first 6 years, then deposited $200 a month for 20 years into an account earning 9% compounded monthly. How much will you have in the end?
Suppose you have decided to put $500 at the beginning of every month in a savings account that credits interest at the annual rate of 5%, but compounds it monthly. Find the amount in this account after 20 years.
My bank is offering a savings plan as follows: The initial yield is 3.25% APY. If I maintain my account for at least 6 months, the yield increases to a 3.75% APY. I plan to start my account with a $2,500 initial deposit and then make regular deposits of $560 per quarter. What is my account balance in 11 months? $4,285 $3,635 $4,206 $4,215
Your bank pays 2.8% interest per year. You put $1,100 in the bank today and $650 more in the bank in one year. How much will you have in the bank in two years? In two years, the amount that you will have is $nothing. (Round to the nearest cent.)
You currently have $20,000 in the bank. The interest rate is 6% compunded monthly. What equal amount could be withdrawn each month for 60 months and have $o left in the account at that time? The first withdrawl takes place one month from today.
A bank offers and investment account that has an annual interst rate of 9.9%, compounded quarterly. At the end of a 132 month year period you'd like to have $50,000 in the account. If your investment is made as a lump sum at the beginning how much do you need to contribute?
A company needs $350,000 to pay a debt four years from now. The company can place cash in a 5% compounding interest-bearing account. How much money should the company invest today in order to meet the goal? Round to the nearest whole dollar.
Cline Corporation deposits $75,000 every quarter in a savings account (beginning at the end of the current quarter) for the next six years so that it can purchase a new piece of machinery at the end of six years. The interest rate is 4%. How much money will Cline Corporation have at the end of six years? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round any intermediary calculations, and round your final answer to the nearest dollar.) Group of answer choices $2,043,240 $2,023,010 $2,931,195 $1,126,935
Your firm sells for cash only, but it is thinking of offering credit, allowing customers 90 days to pay. Customers understand the time value of money, so they would all wait and pay on the 90th day. To carry these receivables, you would have to borrow funds from your bank at a nominal 7%, daily compounding based on a 360-day year. You want to increase your base prices by exactly enough to offset your bank interest cost. To the closest whole percentage point, by how much should you raise your product prices? Do not round intermediate calculations. Round your answer to the nearest whole number.
You just borrowed $15,000 from a finance company to start a business. If you are required to repay $16,800 interest and principal in one year, what is the nominal interest rate that the finance company is charging? If inflation is 2.5%, what is the expected real rate of interest?

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