After graduation, you plan to work for Dynamo Corporation for 12 years and then start your own business. You expect to save anddeposit $8,000 a year for the first 6 years (t = 1 through t = 6) and $16,000 annually for the following 6 years (t = 7 through t = 12).The first deposit will be made a year from today. In addition, your grandfather just gave you a $40,000 graduation gift which you willdeposit immediately (t = o). If the account earns 9% compounded annually, how much will you have when you start your business 12years from now?a. $324,529b. $344,653c. $333,819d. $293,067e. $342,904

AmountFuture Value FactorFuture…

Answered: After graduation, you plan to work for…

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

You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $4300 at the end of each year into a Roth IRA for the next 41 years. If you earn 8 percent compounded annually on your investment, how much will you have when you retire in 41 years? How much will you have if you wait 10 years before beginning to save and only make payments into your retirement account?
You plan on making deposits of $1,000 into a savings account at the end of every year in college. If you graduate in 5 years and the account earns an annual rate of 8%, how much will you have at graduation? PLEASE BREAK IT DOWN
Tala McLouf, a 21-year-old BBA graduate, likes to plan for her future ahead, and would like to save $47.50 every week for her retirement later on. At the end of each year, Tala would invest her total accumulated savings into an account at the local credit union paying her a yearly interest rate of 8.25%. How much money will Tala be able to save per year? How much money will Tala have saved when she reaches 55 years old? How much would Tala have saved by the time she is 60 years old, if she starts investing for her retirement at the age of 40 after paying off the mortgage for her house in Los Angeles? Even if Tala starts saving at 40, she would still like to have the same amount of money in her account when she is 60 as she would have had, had she started saving back when she was 21.
In 9 years, David's child will go to university. David already has $5,800 set aside in the savings account but plans to contribute an additional $900 at the end of each year to this account for his children's education. He anticipates earning an annual return rate of 5% on his savings throughout that time (compounded annually). When his kid is ready to register for university, how much money will David have in this account? (Round time value factors to 3 decimal places and final answer to 2 decimal places. Omit the "$" sign in your response.)
You currently have $12,000 saved up in your bank account. You believe that 2 years from now, some of your generous relatives will give you a combined gift of $5,000 as a college graduation present. If you can earn 4.5% annual compound interest on your savings, how many years will it take you, from today, to be able to afford the car you'd like to purchase, which costs $25,000?
You recently graduated and received a S5, 000 gift from your parents. Additionally, you secured a job with a monthly paycheck of S4, 000 after deductions. You decide to invest the gift and 10% of your monthly paycheck into an ETF that you expect to grow at a rate of 0.7% per month. What will be the balance of your investment account after 10 years assuming that your paycheck amount remains the same over these 10 years? Group of answer choicesS76, 392S86, 382S92, 133S87, 314
To complete your last year in business school and then go through law school, you will need $5,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $5,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 8.5% interest a sum of money that is sufficient to provide the four payments of $5,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". How large must the deposit be? $ How much will be in the account immediately after you make the first withdrawal? After the last withdrawal? After the first withdrawal: $ After the last withdrawal: $
When you begin your new job, your employer says they will match any 401k deposits you make by 50% up to 5% of your overall salary annually. When you start your new job as a college grad, you will make $50400 per year and you decide to take full advantage of the matching by depositing 5% of your monthly salary every month. a) How much will YOU be depositing in the 401k each month from your salary? $ b) How much will YOUR EMPLOYER be depositingin the 401k each month? c) How much TOTAL will be deposited into your 401k each month? $ d) How much will you have in the account in 35 years if it pays 7.5% APR? $ e) How much total money will you put into the account after 35 years? $ f) How much total will the employer have put into the account after 35 years? $ g) How much total interest will you earn? $ h) If you choose NOT to take advantage of depositing money into the 401k because you feel you need that money to pay bills now, how much money will you be losing from your employer and interest…
In December 2018, Eric puts $1600 into a bank account. He then deposits an additional $1000 each year thereafter. The account earns 4% interest, compounded annually. When Eric has a total of at least $50,000 in his account at the beginning of a year he will buy a house. In what year will this happen?
Your son Tommy was just born today (Year O), and you are planning for his college education. You would like to make equal deposits every 26 weeks (assume a 52-week year) into a college savings account starting in Year 1 and ending in Year 21 (a total of 41 deposits), so that Tommy can make annual withdrawals in Year 18, 19, 20, and 21 for tuition. Tuition is currently (Year 0) $2,900/year, and it is expected to grow at 4% / year for each of the next 10 years, and then at 5%/year for all years after. You can earn a nominal annual rate of 8.45%, with interest compounded weekly (52-week year) in a college savings account. How much must each of the 41 deposits be to exactly fund the expected tuition expense? O $277.87 O $264.49 O $258.02 O $248.10 O $287.80
At 24, you finish college and are fortunate enough to have a job waiting for you. Your first job has a starting salary of $75,000 per year. This salary is expected to increase by $5,000 each year. You decide to start saving for retirement right away. Each year you invest 5% of the year’s salary in an account that earns 10% interest, compounded yearly. For simplicity, assume the deposit is made at the END of each year (so if age 24 is t = 0, then the first deposit will be at age 25). If you continue to save in this manner, how much will be in your retirement account immediately after you make the deposit at age 45?
Your best friend Sam is in discussion with you about saving for his retirement. You are to advisehim on how much he should deposit annually to meet his retirement needs. Assume that he willdeposit a fixed annual amount for the next 20 years into a retirement savings account, startingone year from now. Sam has a son who will be attending college and plans to make 5 withdrawals(starting one year after making his final deposit into the retirement account) of $35,000 each topay for his annual tuition for the following 5 years. Commercial Banks will be paying 6 percenton such retirement accounts for the next 25 years. Kindly advise Sam on how much he shouldplace in the account annually to cover his retirement needs.

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

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