A student saved $3,000 per year from 1986 to2001 (15 years) in an account with 8% interest.He stopped depositing money after year 2001,but the money was kept in the same accountearning interest. In 2007 he withdrew $20,000for down payment toward purchase of a newhouse. In 2012 he received an inheritance as asingle payment of $50,000, which hedeposited in the same account. What is thecurrent balance of the account (2021)?

We need calculate future value of annuity from 1986 to 2011 by using this equation FVn =CF(1+i)n -1i…

A student saved $3,000 per year from 1 2001 (15 years) in an account with 8% ir He stopped depositing money after yea but the money was kept in the same ace earning interest. In 2007 he withdrew $ for down payment toward purchase of a house, In 2012 he received an inheritan

A student saved $3,000 per year from 1 2001 (15 years) in an account with 8% ir He stopped depositing money after yea but the money was kept in the same ace earning interest. In 2007 he withdrew $ for down payment toward purchase of a house, In 2012 he received an inheritan

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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Question

A student saved $3,000 per year from 1986 to
2001 (15 years) in an account with 8% interest.
He stopped depositing money after year 2001,
but the money was kept in the same account
earning interest. In 2007 he withdrew $20,000
for down payment toward purchase of a new
house. In 2012 he received an inheritance as a
single payment of $50,000, which he
deposited in the same account. What is the
current balance of the account (2021)?

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When my father passed away I inherited a back account containing $18,000 earning 4% effective annual interest. I plan to withdraw the interest plus $3,000 at the end of each year for the next 6 years. If I put both in a second account earning 7% effective annual interest. What is the accumulated value of the second account after 6 years
3. Brittney won $765,000 in a lawsuit against MIT over theft of intellectual property. She and Santana decide to invest the money in a college fund for their 5-year-old daughter. How much will they have when their daughter is 18? Calculate the balance for each of the following account options: a. 4.36% APR interest compounded continuously b. 4.49% APR interest compounded quarterly c. 4.6% APR interest compounded yearly
5. Lamar has received $2,000 each year for college from his grandmother for the four years that he was in high school. He has deposited the money on the same day each year in an account that pays 8% interest, compounded annually. Complete the table below to determine how much money Lamar has saved. Amount of Beginning balance ($) deposited ($) balance ($) rate (%) Ending balance ($) Amount New Interest Year interest earned ($) $0 $2,000 $2,000 8% $160 $2,160 $2,160 $2,000 $4,160 8% $332.80 $4,492 $4,492 $2,000 $6,492 8% $519.36 $7,011 $7,011 $2,000 $9,011 8% $720 $9,731 4.
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a mother earned $15000.00 from royalties on her cookbook. She set aside 20% of this for a down payment for a new home. The balance will be used for her son's future education. She invested a portion of the money in a bank certificate of a deposit (cd account) that earns 4% and the remainder in a savings bond that earns 7%. IF the total interest earned after one year is $720.00, how much money was invested at each rate?
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