2. Mary Joy bought a life insurance earning 10% compounded annually. Instead of payingevery year, she decided to give her contribution of P9 000 every quarter. How much will theinsurance company pay her if she bought a 25-year term plan?3. Michael wants to buy a car worth P850 000 in 5 years. How much must he pay annually for5 years starting today of money is worth 5% compounded monthly?

The future value of money includes the principal amount deposited and interest accumulated over the…

ary Joy rery year, she decided to give her contribution of P9 000 every quarter. How much surance company pay her if she bought a 25-year term plan? Michael wants to buy a car worth P850 000 in 5 years. How much must he pay annu 5 Vears starting today of money is worth 5% compounded monthly?

ary Joy rery year, she decided to give her contribution of P9 000 every quarter. How much surance company pay her if she bought a 25-year term plan? Michael wants to buy a car worth P850 000 in 5 years. How much must he pay annu 5 Vears starting today of money is worth 5% compounded monthly?

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

Related questions

Q: Mr and Mrs Chong are considering two types of education saving for their children. Saving A requires…

A: Here, Details of Saving A: Deposit Amount is RM 500 at the end of each month Interest rate is 3%…

Q: Ms. Lun is earning P20,000 per month. She plans to invest in an insurance company an amount…

A: Monthly Earning of Ms. Lun P20,000 Annual Earning of Ms. Lun (P20000 * 12) P2,40,000 Amount…

Q: 15. Your sister bought a condominium unit for P9 300 000 through a condominium loan which she…

A: The total value of condominium is P 9,300,000 out of which 30% is paid with equity and the rest of…

Q: Don Williams wants to buy a boat five years from today. He will need $40,000. Don wants you to…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: How much should Emmi expect to get after 5 years if she invest n$ 500.00 in today? this with an…

A: Investment = $ 500 Annual interest rate = 3% Period = 5 Years

Q: If US dollars gets lower interest rates in the United States. How would this affect a fundamental…

A: There are two methods to calculate the future or forward currency exchange rates - Interest rate…

Q: Susan Orman wants to pay $1500 semiannually to her granddaughter for 10 years for helping her around…

Q: 1. If money is worth 5% compounded quarterly, how much must Julea save every end of three months to…

A: Here we will use the concept of time value of money. As per the concept of time value of money it is…

Q: Joe and Alicia want to put money in a savings account now so that they will have $2000 in 5 years.…

A: To calculate the investment amount we will use the below formula Investment amount = F/(1+r/m)n*m…

Q: urt borrowed from a bank and wants to start paying P50,000 annually at the end of the 4th year. If…

A: In this we need to find the present value of payment today.

Q: 9) Steve plans to purchase a house and needs to save $75,000 for a down payment over the next 5…

A: The Future Value of the Annuity refers to the sum value of all the payments which is occurred…

Q: selling their house. Offer #1 puts $8094 down and pays the lump sum $140010 in 3 months. Offer #2…

A: Simple interest is simple that means no interest on interest and there is no compounding of interest…

Q: A 13-year-old has his dad save $100 of his birthday money for the next family vacation. How much…

A: Here, Amount of savings today (PV) = $100 Interest rate (RATE) = 2.68% Time period (NPER) = 15…

Q: b. Calculate the upfront amount that she should pay under the alternative payment agreement so that…

A: Equivalent value today is present value of both payments based on time and interest rate off money…

Q: Jon buys a car for $25,000. He pays $5000 down and pays the balance in 60 equal monthly payments. If…

A: Computation:

Q: nswoman, wishes to gift her boyfriend P20,000 on their 10th anniversary which is 10 years from now.…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Cooper wants to save for college. Assuming he puts $5,000 into an account at the end of each year…

A: Money invested anywhere changes in value with the change in time. This is simply understood as the…

Q: In order to save for her high school graduation, Maria decided to save P200 at the end of every…

A: The correct answer with calculation is given in the below step.

Q: How much should her contributions be?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 6. Mary is paid bi-weekly and she is currently 20 years old. Mary wants to have $500 at the end of…

A: A retirement plan refers to the investment to be made in the savings account that provides the…

Q: David needs R30835,42 to buy a second hand trailer. How long will it take him to save towards this…

A: In this we need to calculate number of weeks required to achieve that.

Q: Carrie grandfather owns a farm. The farm earned $270,000 this year. The profits are expected to grow…

A: The question is based on the concept of valuing an investment using the Gordon Growth Model (also…

Q: Which of the following is not an established method of translation? O a. Forward method O b.…

A: If a business entity operates in other countries, different currencies are used for reporting the…

Q: Crispin wants to buy a motorcycle. His mother will loan him some money at only 6% compounded…

A: Given, The rate is 6% compounded quarterly. Amount to be repaid is P3600 in 2 years

Q: B. Ordinary Annuities 1. Roselyn spends Php 850 per month on cigarettes. If she stops smoking and…

A: An ordinary annuity is a series of equal payments made at the end of consecutive periods over a…

Q: Jennifer buys a $300,000 house and pays $100,000 down. The loan is for 30 years and is at 4%…

A: Monthly payments is calculated by present value of annuity formula. r is interest rate and n is…

Q: What quarterly deposits should Daniella make in order to save $50,000 in 15 years if money can earn…

A: The Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…

Q: Michael wants to have $63,000 in 9 years on a savings plan that requires monthly contributions. If…

A: Future Value = fv = $63,000Compound = monthly = 12Time = t = 9 * 12 = 108Interest rate = r = 7 / 12…

Q: Tasha borrowed $18000 to purchase a new car at 11% APR, with monthly payments of $391.36 for 5…

A: The amount required to be paid in total for the amount borrowed refers to the amount paid for the…

Q: Trevor took a loan of $7,700 from her parents to purchase equipment for her hair salon. If they…

A: We have to find the quarterly payment that will amortize the loan in full. It's a time value of…

Q: Leon wants to save a classic car so he deposits $1500 at the end of the years into a savings account…

A: We need to use future value of ordinary annuity formula to calculate worth of deposit after 5 years.…

Q: 1. Your sister bought a condominium unit for P9 300 through a condominium loan which she availed of…

A: price of condominium = P9300 downpayment = 30% financed amount = p9300 x (1-30%) = P9300 X 70% =…

Q: V4. Samantha was supposed to make a payment of $4,250 in 2 years and another payment for $1,300 in 5…

A: The money's time value concept indicates that any sum is worth more now as compared to the upcoming…

Q: All else held constant, which of the following would make the put option on the common stock more…

A: Put options provide investors with the right, but not the obligation, to sell a specified amount of…

Q: Student E saves his allowance worth of P 25,000 and promised to use it only when it reaches the…

A: Present value (PV) = P 25,000 Future value (FV) = P 45,000 Interest rate = 8% Quarterly interest…

Q: stal Nelson would love to retire to Florida in 5 years. What amount should Crystal invest today so…

A: In this we need to calculate the money required to today to get required pension.

Q: An engineering student borrowed an amount of P 25,000 to be paid in 1 year and an amount of P 75,000…

A: Future value is the amount that is being considered for the purpose of compounding the present value…

Q: Payments of Ordinary Annuities Ryan wants to get together $40 000 to purchase the first house in his…

A: Solution:- When an equal amount is deposited each period at end of period, it is called ordinary…

Q: argaret Foster wants to buy a new camper in 6 years. She estimates the camper will cost $6,400.…

A: Future value refers to the value of a current asset at some future date affected due to inflation…

Q: Calculate the amount of money that must be saved at this time.

A: Formula for present value annuity is; PV = FV/(1+(r/n))nt Where as, PV = Present value FV = Future…

Q: How much is the cash price of the car if Mrs Ocampo is to pay Php 21,000 monthly in 5 years? The…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: Vanessa was supposed to make a payment of $3,500 in 2 years and another payment for $1,800 in 5…

A: Equivalent value today is the present value of both payments based on time and interest rate of…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

2. Mary Joy bought a life insurance earning 10% compounded annually. Instead of paying
every year, she decided to give her contribution of P9 000 every quarter. How much will the
insurance company pay her if she bought a 25-year term plan?
3. Michael wants to buy a car worth P850 000 in 5 years. How much must he pay annually for
5 years starting today of money is worth 5% compounded monthly?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

Mr. Ali deposited 5000 OMR today into a security that pays him 10 % interest compounded. He wanted to know how much money he will have at the end of 3 years Calculate the amount?
Karen and Mike pay $700 and $900 a year on seperate insurance. If they used same company save 10%. Whatsd the future annual savings over 10 years based on annual interest rate of 4%?
2. a. Jake is 10 years from retirement. He has decided that in order to be comfortable and be able to travel, he needs to have an income of $8000 per month. How much does he need ta have in his retirement that earns 8% per year compounded monthly, in order to withdraw S8000 per month for 30 years?
4.
John and Rosamond want to retire in 5 years and can save $140 every three months. They plan to deposit the money at the end of each quarter into an account paying 8.72% compounded quarterly. How much will they have at the end of 5 years? (Round your answer to the nearest cent.)_____$
Yoir neighbour would like to set money asideto purchase land in 15 years. Theybwould like to gabe S 500,000 set aside in 15 years, if they make annual payments and can earn 12% interest per year, how much money do they need to invest each year?
Jamal wants to save $55,000 for a down payment on a home. How much will he need to invest in an account with 8 APR, compounding daily, in order to reach his goal in 5 years?
Nalan saved the monthly 400 TL scholarship from the General Directorate of Credits and Dormitories, which she received for 4 years. After 15 years she is going to pay it back in 4 years as equal payments (R) (in todays dollars). If the market interest rate is 24% compounded monthly and the inflation rate is 3%. Calculate the R values?
$25,000 at the beginning of each year for 30 years starting when he retires 10 years from now. If the account gains 5% interest how much money does he need in the account today?
Faye wants to save $90 000 in 3 years for a down payment on a house. She plans to make equal monthly payments of $2233.69 into an account earning 7.6% per year compounded monthly. How would Faye's monthly payments change if she saves for twice as long, 7 years? Her payments would be less than half O a) as much. O b) Her payments would increase. Her payments would be exactly half as c) much. d) Her payments would decrease but be more than half as much.
Your grandmother closed her bank account from a thrift bank and gotP6, 000, 000 with the 8% annual interest given. She said she has been savingup a same amount each year for 30 years where 8% interest has beenapplied. How much would her annual savings deposits be when her lastdeposit was a year ago? ANS:49, 041.3 show solution
Lauren deposited $10,000 today. He plans to withdraw $1100 every year. For how long can she withdraw from the account starting 1 year from now if interest is 89% compounded annually? State your answor in years and months (trom 0 to 11 months) This is an example of OA Compound Interest Problem (PMT-0) OB. Payout Annuity Problem (FV0) OC. Savings Annuity Problem (PV= 0) The TVM variable being solved is OA PMY OB. n Use your TVM solver to answer the following questions (a) It will take years to depelete the account Round UP to the nearest whole period (b) She can make withdrawals for year(s) and month(s) Answers should be whole numbers with months is between 0 and 11 CHES O.C. FV OD. PV

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