A relative has promised to pay you $93.00 today, and he will pay you additional payments every year for the next five years. Each year he will add $73.00 to the previous payment. (So, the payment in year 1 will equal $166.00). You decide to save every dollar you are given and will invest the money in an account paying 4.00% annual interest. How much money will you have accumulated in five years? Keep in mind that you will have six total cash flows to invest. Submit Answer format: Currency: Round to: 2 decimal places.

A relative has promised to pay you $93.00 today, and he will pay you additional payments every year for the next five years. Each year he will add $73.00 to the previous payment. (So, the payment in year 1 will equal $166.00). You decide to save every dollar you are given and will invest the money in an account paying 4.00% annual interest. How much money will you have accumulated in five years? Keep in mind that you will have six total cash flows to invest. Submit Answer format: Currency: Round to: 2 decimal places.

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

You want to be able to withdraw $50,000 from your account each year for 25 years after you retire. You expect to retire in 15 years. If your account earns 7% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
1. What is the amount you would have to deposit today to be able to take out $2070 a year for 2 years from an account earning 14 percent. 2. If you desire to have $38300 for a down payment for a house in 11 years, what amount would you need to deposit today? Assume that your money will earn 4 percent.
You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent. Required: How much would you need to have saved in your retirement fund to achieve this goal? a) Assume that the perpetuity payments start on the day of your retirement. b) Assume that the perpetuity payments start one year from the date of your retirement.
You want to be able to withdraw $25,000 from your account each year for 30 years after you retire. You expect to retire in 20 years. If your account earns 8% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
You intend to buy a vacation home in seven years and plan to have saved $50,000 for a down payment. How much money would you have to place today into an investment that earns 8% per year to have enough for your desired down payment?
You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you insist on paying them interest. The agreement is that they will lend you $6000.00 at a simple interest rate of 1.5% per year. In how many months will the interest be $360.
You want to retire on the day you have $900,000 in your savings account. You expect to earn 6 percent, compounded monthly, on your money during your retirement. Your plan is to withdraw $5,750 a month as retirement income from this account. How many years can you be retired until you run out of money? A) 24.75 B) 24.91 C) 25.20 D) 25.50 (Please try to explain by using a Financial Calculator)
if you have $100 in a savings account and the interest rate is 10% per year and you never withdraw or deposit money, how much will you have in the account after: one year, two years
You decide to save $9300 by making annual deposits for 5 years into an account that pays 7% compounded annually. Once the payments stop, you plan to leave the money in the account for an additional 2 years. What size deposits do you need to make?
your aunt plans to give you the following amounts on cash $1,100 six months from today, $3000 one year from today, $2,300 eighteen months from today, $1,800 twenty four months from today and $1900 thirty months from today. how much money will you have in total after the last cash payment if you invest these cash payments at a rate of 7%
You plan to buy property in Florida 8 years from today. To do this, you estimate that you will need $ 45000 at that time for the purchase. You would like to accumulate these funds by making equal annual deposits into your savings account, which pays 9% annually. If you make your first deposit at the end ofthis year, and you would like your accountto reach$ 45000 when the final deposit is made, what amount do you need to deposit annually?
Use the following to answer the next two questions: You decide to be in saving for your retirement days. You begin with depositing $300 per month into a savings account that is earning 12% per year compounded monthly. You may deposit faithfully for 25 years at which time you'll retire. Your institution wants to keep your money and as an incentive begins paying 15% per year compounded monthly provided your delay, taking out any money for four years. After four years, you decide to begin withdrawing equal payments for the next 20 years. What are the equal monthly payments that you can withdraw if you want the account to last for 20 years?

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