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A company must pay a $303,000 settlement in 5 years. (a) What amount must be deposited now at 5% compounded semiannually to have enough money for the settlement? (b) How much interest will be earned? (c) Suppose the company can deposit only $100,000 now. How much more will be needed in 5 years? (d) Suppose the company can deposit $100,000 now in an account that pays interest continuously. What interest rate would they need to accumulate the entire $303,000 in 5 years? (a) The amount that must be deposited is $. (Do not round until the final answer. Then round to the nearest hundredth as needed.) (b) The amount of interest earned will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (c) The additional amount needed in 5 years will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (d) The company will need an interest rate of %. (Do not round until the final answer. Then round to the nearest hundredth as needed.) ...

A company must pay a $303,000 settlement in 5 years. (a) What amount must be deposited now at 5% compounded semiannually to have enough money for the settlement? (b) How much interest will be earned? (c) Suppose the company can deposit only $100,000 now. How much more will be needed in 5 years? (d) Suppose the company can deposit $100,000 now in an account that pays interest continuously. What interest rate would they need to accumulate the entire $303,000 in 5 years? (a) The amount that must be deposited is $. (Do not round until the final answer. Then round to the nearest hundredth as needed.) (b) The amount of interest earned will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (c) The additional amount needed in 5 years will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (d) The company will need an interest rate of %. (Do not round until the final answer. Then round to the nearest hundredth as needed.) ...

Essentials Of Investments
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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Please answer A-D
A company must pay a $303,000 settlement in 5 years. (a) What amount must be deposited now at 5% compounded semiannually to have enough money for the settlement? (b) How much interest will be earned? (c) Suppose the company can deposit only $100,000 now. How much more will be needed in 5 years? (d) Suppose the company can deposit $100,000 now in an account that pays interest continuously. What interest rate would they need to accumulate the entire $303,000 in 5 years? (a) The amount that must be deposited is (Do not round until the final answer. Then round to the nearest hundredth as needed.) (b) The amount of interest earned will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (c) The additional amount needed in 5 years will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (d) The company will need an interest rate of ☐%. (Do not round until the final answer. Then round to the nearest hundredth as needed.)
Transcribed Image Text:A company must pay a $303,000 settlement in 5 years. (a) What amount must be deposited now at 5% compounded semiannually to have enough money for the settlement? (b) How much interest will be earned? (c) Suppose the company can deposit only $100,000 now. How much more will be needed in 5 years? (d) Suppose the company can deposit $100,000 now in an account that pays interest continuously. What interest rate would they need to accumulate the entire $303,000 in 5 years? (a) The amount that must be deposited is (Do not round until the final answer. Then round to the nearest hundredth as needed.) (b) The amount of interest earned will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (c) The additional amount needed in 5 years will be $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (d) The company will need an interest rate of ☐%. (Do not round until the final answer. Then round to the nearest hundredth as needed.)
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