a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 9 percent on th c. At the end of five years, you will receive $10,000 and deposit this in the bank toward your goal of $56,000 at the end of year 14. In addition to the lump-sum deposit, how percent on your deposits.) a. How much must you deposit annually to accumulate this amount? (Round to the nearest cent.) b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should the lump-sum deposit be? (Round to the nearest cent) c. If you deposit $10,000 received at the end of five years in the bank, what will the amount grow to by the end of year 14? (Round to the nearest cent.) In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Round to the nearest cent) Camis

a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 9 percent on th c. At the end of five years, you will receive $10,000 and deposit this in the bank toward your goal of $56,000 at the end of year 14. In addition to the lump-sum deposit, how percent on your deposits.) a. How much must you deposit annually to accumulate this amount? (Round to the nearest cent.) b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should the lump-sum deposit be? (Round to the nearest cent) c. If you deposit $10,000 received at the end of five years in the bank, what will the amount grow to by the end of year 14? (Round to the nearest cent.) In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Round to the nearest cent) Camis

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

See similar textbooks

Similar questions

a) How much must be deposited today into an account earning 3% interest annually to support an annual withdrawal of $1800 a year in a perpetuity? b) what if the first withdrawal starts at the end of year 6?
You would like to have $37,000 in 5 years for the down payment on a new house following college graduation by making deposits at the end of every three months in an annuity that pays 4.25% compounded quarterly. How much should you deposit at the end of every three months? How much of the $37,000 comes from deposits and how much comes from interest?
(Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $19,000 at the end of 11 years. To do this you plan on depositing an ←equal amount into the bank at the end of each year. If the bank is willing to pay 15 percent compounded annually, how much must you deposit each year to reach your goal? To reach your goal, your annual deposit must be $ (Round to the nearest cent.)
How much do you have to deposit today so that beginning 11 years from now you can withdraw $12,000 a year for the next 6 years (periods 11 through 16) plus an additional amount of $24,000 in the last year (period 16)? Assume an interest rate of 9 percent.
A person wishes to deposit $5,000 per year in a savings account which earns interest of 8 percent per year compounded annually. Assume the first deposit is made at the end of this current year and additional deposita at the end of each following year. (a) To what sum will the investment grow at the time of the 10th deposit? (b) How much interest will be earned?
you want to establish an annuity that will pay $7,500 for the next twenty years (end year) your financial institution will establish such an annuity if you deposit $104,000 today. what is the implied rate that the institution is paying on this annuity?
How much do you have to deposit today so that beginning 14 years from now you can withdraw 15,000 a year for the next 4 years (periods 14 through 17) plus an additional amount of 30,000 in that last year (period 17)? Assume an interest rate of 11 percent.
You deposit $1.2 milion into vour account to cover expenses in the next 12 vears. The account earns interest at the rate of 4%, compounded annually. Assume you expect the balance of the account to be $0 at the end of the 12th year. A) What annual level of living expenses Will your initial deposit support. (e.g., what equal annual withdrawal can you make for the next 12 years )? b) Suppose you realize your living expenses will increase at an annual rate of 2% due to inflation. Determine the updated annual spending plan in the line with this model how much can you withdrawal at the end of the first year. knowing that your withdrawal will increase by 2% each year? C) Suppose the initial deposit is still planned to support your equal annual expenses in the next 10 years as in part a but don't need to withdraw any money from your account for the first 6 years. You will withdraw from your account annually starting from the end of year 7 till the end of year 12. What annual level of living…
You need to have $34,500 in 14 years. You can earn an annual interest rate of 5 percent for the first 4 years, 5.6 percent for the next 3 years, and 6.3 percent for the final 7 years. How much do you have to deposit today? MUST USE EXCEL FORMULA, NOT ALGEBRAICALLY!
Do
You expect to deposit the following cash flows at the end of years one (1) through to five (5), $1, 000, $4, 000, $9, 000, $5, 000 and $2, 000 respectively. What is the future value at the end of year six (6) if you can earn 10% compounded annually?
Suppose you are going to invest $11,000 per year for six years. The appropriate interest rate is 9 percent. What is the future value if the payments are made on the last day of the year? What if the payments are made on the first day of the year? a) $82,756.68; $90,204.78 b) $90,204.78; $82,756.68 c) $49,345.10; $53,786.16 d) $53,786.16; $49,345.10

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS