An Initial payment of $6,000 is deposited into a bank with a nominal annual interest rate of 9.5%, compounded seml-annually. You would like to withdraw this amount In in a series of 5 equal annual sums, with the first withdrawal beling 1 year form the deposit. What is the amount that should be withdrawn each year? O $3,571.71 O $2,571.71 O $2,271.71 O $1,571.71

An Initial payment of $6,000 is deposited into a bank with a nominal annual interest rate of 9.5%, compounded seml-annually. You would like to withdraw this amount In in a series of 5 equal annual sums, with the first withdrawal beling 1 year form the deposit. What is the amount that should be withdrawn each year? O $3,571.71 O $2,571.71 O $2,271.71 O $1,571.71

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

Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $150 is deposited monthly for 15 years at 6% per year
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?
If you deposit $500 every 6 months for 7 years at an interest rate 20% compounded quarterly, how much money will you have in your account at the end of 7 years? A. $10,985 B. $16,560 C. $12,685 D. $14,255
Assume that you borrow 50,000 JPY under the system of 5% yearly compound interest. (1) If you repay annually in the plan of principal equal payment and pay off at the 10th repayment, calculate the total amount of all 10 repayments. (2) If you repay annually 8,000 in the plan of total (principal and interest) equal payment, you will pay off at 8th payment. How much is your final (8th) payment ? (1) (2)
If $20,000 is set aside for 4 years after 16 years. Uniform deposits starting 3 years from now and continue through year 16, what should each deposit be? If the account earns 8% interest per year?
Six months from today, you wish to begin making an infinite series of semiannual withdrawals of $600 each from an account that offers an annual stated rate of interest, r = 10 percent compounded semiannually. To make this possible you plan to make a single deposit today, at the beginning of year one. What must be the amount of this deposit?
What amount must be deposited today, if, starting one year from today, you wish to make 15 equal annual withdrawals of $3,450 from an account offering an annual stated rate of interest r = 0%?
Determine the amount of money in a savings account at the end of 4 years, given an initial deposit of $13,000 and a 4 percent annual interest rate when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) a. Annually b. Semiannually c. Quarterly Future Value
A bank pays 6% interest compounded semiannually. Use appropriate formula to find out how much should be deposited in $ now to yield an annuity payment of $900 at the beginning of each 6 months for 12 years
Answer the subquestions below: a. Mr. Formento pays at the end of every month for a loan that charges 5% interest compounded quarterly. What type of annuity certain is this? b. Determine the amount after 5 years of a P1,500 deposit every end of 3 months in an account paying 12% compounded quarterly. c. how much should be invested at the end of every six months at 12%compounded quarterly in order to accumulate P50,000 after 6 years?
A deposit X is to be made today and a second deposit, which is twice the first, is to be made 3 years from now, to provide for withdrawals of $1,000 two years from now and $6,500 10 years from now. At an effective annual interest rate of 7%, calculate the size of the first deposit.
Your bank offers to lend you $120, 000 at an 8.25% annual interest rate to start your new business. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying in Year 2? a. $5,904.06. b. $8,487.08 0 c. $6,642.06• d. $7,011.07. e. $9224.68

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