Anthony and Michelle Constantino just got married and received $28,000in cash gifts for their wedding. How much will they have on their twenty-fifth anniversary if they place half of this money in a fixed-rate investment earning 10 percent compounded annually? Would the future value be larger or smaller if the compounding period was 6 months? How much more or less would they have earned with this shorter compounding period? If they place half of this money, PV, in a fixed rate investment earning 10percent compounded annually, the amount they will have, FV, on their twenty-fifth anniversary is $ (Round to the nearest ce
Anthony and Michelle Constantino just got married and received $28,000in cash gifts for their wedding. How much will they have on their twenty-fifth anniversary if they place half of this money in a fixed-rate investment earning 10 percent compounded annually? Would the future value be larger or smaller if the compounding period was 6 months? How much more or less would they have earned with this shorter compounding period? If they place half of this money, PV, in a fixed rate investment earning 10percent compounded annually, the amount they will have, FV, on their twenty-fifth anniversary is $ (Round to the nearest ce
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
Related questions
Question
Anthony and Michelle Constantino just got married and received $28,000in cash gifts for their wedding. How much will they have on their twenty-fifth anniversary if they place half of this money in a fixed-rate investment earning 10
percent compounded annually? Would thefuture value be larger or smaller if the compounding period was 6 months? How much more or less would they have earned with this shorter compounding period?
percent compounded annually? Would the
If they place half of this money, PV, in a fixed rate investment earning 10percent compounded annually, the amount they will have, FV, on their twenty-fifth anniversary is $ (Round to the nearest cent.)
Transcribed Image Text:Data table
1
2
3
4
6
6
7
1.072 1.149 1.230
8
1.083 1.172 1.267
9 1.094 1.195 1.305
10 1.106 1.219 1.344
11
1.116 1.243 1.384
1.127 1.268 1.426
12
13
1.130 1.294 1.469
14
1.149 1.319 1.513
15 1.161 1.346 1.568
16 1.173 1.373 1.605
17
1.184 1.400 1.663
18 1.196 1.428 1.702
19 1.200 1.457 1.764
20
21
22
1.220 1.436 1.506
1.232 1.516 1.860
1.245 1.546 1.916
1.257 1.577 1.974
1.608 2.033
1.270
1.282
1.348
1.641 2.094
1.811 2.427
1.489
2.208 3.262
1.645 2.692 4.384
SSSXXX
23
24
25
30
40
1%
2%
3%
1.010 1.020
1.030
1.020 1.040 1.061
1.030
1.061 1.093
1.041
1.002 1.126
1.051 1.104 1.159
1.062 1.126 1.194
50
3.5%
1.036
1.071
1.109
1.148
1.188
1.229
1.272
1.317
1.363
1.411
1.460
1.511
1.564
1.619
1.675
1.734
1.796
1.857
1.923
1.990
2.059
2.132
2206
2283
2.363
2.807
3.959
5.585
Compound Sum of $1 (FVIF)
6%
1.040
1.050
1.002 1.103
1.125
1.158
1.170
1217
1.265
1.873 2.183
1.948 2.292
1.216 1.262
1.276 1.338
1.340
1.419
1.316
1.407
1.504
1.369 1.477
1.594
1.423 1.561 1.689
1.480 1.629 1.791
1.539
1.601
1.710 1.890
1.796
1.665 1.836
1.732
1.900
2.079
1.801
4.801
7.107
7%
1.060
1.070
1.124 1.145
1.191 1.225
2.026
2.407
2.107
2.527
2.693
2.854
3.026
2.191 2.653 3.207
2.279 2.786
2.370 2.925
2.465 3.072
2.563
3.225
2.666
3.243
1.000
1.166
1.260
1311 1.360
1.412
1.403 1.469 1.539
1.501 1.587
1.677
1.606 1.714
1.718 1.861
1.838
1.999
1.967 2.159
2.105 2.332 2.500
2.133
2012 2252 2.518 2.813
2.410 2.720 3.066
2.937 3.342
2.759 3.172
2261 2679
3.642
2.397
2.540 2.952 3.426 3.970
3.700
4.328
3.159
3.380
3.996 4.717
3%
9%
3.617 4.316
3.870
3.400 4.141
3.604
4.430 5.437
3.820
4.741
6.871
4.049
5.072
6.341
3.306 4.292 5.427
4.322
7.040
11.067 18.420
1.090
1.188
1.295
1.828
1.993
2.172
2.367
6.142
4.661 5.604
6.034 6.109
6.669
7.258
7.911
6.845
8.623
5.743 7.612 10.063 13.268
10.256 14.974 21.725 31.409
29.457 46.902 74.358
10%
1.100
1.210
1.331
1.464
1.611
1.772
1.949
2.144
2.358
2.594
2.853
3.138
3.452
3.797
4.177
4.595
6.064
5.560
6.116
6.727
7.400
8.140
8.964
9.850
10.835
17.449
45.259
117.391
Expert Solution
Step 1
Data given:
Amount received =$28,000
PV=Amount to be invested = $28000 /2 = $14000
r=Rate = 10% compounded annually
t= 25 years
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
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