2. Time Value of MoneyAssume that twenty years from now, you will need $50,000 and that your bankcompounds interest at a 2 percent annual rate.A. How much do you need to deposit today in order to have a balance of $50,000 in20 years? Explain and show your work.B. Suppose instead that you want to make equal payments in years 1 through 19 toaccumulate $50,000 in year 20, how large must each of the 19 payments be?Explain. C. If your (very reliable) aunt were to offerfor you or to give you $35,000 one year from now, which would you choose?Explain. (Even if you could not solve for the answer in part B, please explainwhat criterion you would use to make the choice.)make thepayments found in part (B)3. Capital Asset Pricing ModelA. Suppose you invest $400,000 in Treasury Bills that have a yield to maturity of 4%and $600,000 in the market portfolio with an expected return of 14%. What is theexpected return on your portfolio? Please show and explain.

“Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Assume that twenty years from now, you will need $50,000 and that your bank compounds interest at a 2 percent annual rate. A. How much do you need to deposit today in order to have a balance of $50,000 in 20 years? Explain and show your work.

Assume that twenty years from now, you will need $50,000 and that your bank compounds interest at a 2 percent annual rate. A. How much do you need to deposit today in order to have a balance of $50,000 in 20 years? Explain and show your work.

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

Solve it fast and correctly please .
Reaching a Financial Goal You need to accumulate $10,000. To do so, you plan to make deposits of $1,300 per year - with the first payment being made a year from today - into a bank account that pays 13% annual interest. Your last deposit will be less than $1,300 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal? Do not round intermediate calculations. Round your answer up to the nearest whole number. year(s) How large will the last deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $
Suppose you'd like to save enough money to pay cash for your next car. The goal is to save an extra $⁢28,000 over the next 33 years. What amount must be deposited quarterly into an account that earns 4.7% interest, compounded quarterly, in order to reach your goal? Round your answer to the nearest cent, if necessary.
不 a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate Time Financial Goal $? at the end of each year 3% compounded annually 15 years $130,000 Click the icon to view some finance formulas. a. The periodic deposit is $ (Do not round until the final answer. Then round up to the nearest dollar as needed.) this View an example Get more help 4 Clear all Chec
If you want to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%?
Assume that you have $10,000,000 in your bank account. You wish to withdraw $400,000 per year, at the end of each year, for the next 5 years, after which you wish to have $11,000,000 in the bank. What is the balance in your account after the 2nd year (after the withdrawal)? Hint: you will need first to solve for rate in Excel given all other parameters. Watch signs. Select one: a. $10,366,644 b. $10,600,000 c. $9,600,000 d. $10,488,912
a. You need $17,000 in five years but you only have $12,000 now. At what interest rate must you invest the money assuming the interest is compounded annually? b. You have a $20,000 note payable which is due in three years. How much money must you put into a savings account today in order to have enough money to pay off the debt on time assuming your savings account earns 3% interest compounded annually? c. You put $2,750 into an account earnings 4% interest compounded QUARTERLY. How much will be in this account at the end of 4 YEARS? d. In question “b." above, if you leave he money in the account for one more YEAR, how much more interest will you earn in that additional year (Year 5)? e. How long will it take to double $2,000 to $4,000 assuming you invest the $2,000 into an account earning 7% interest compounded annually?
your aunt plans to give you the following amounts on cash $1,100 six months from today, $3000 one year from today, $2,300 eighteen months from today, $1,800 twenty four months from today and $1900 thirty months from today. how much money will you have in total after the last cash payment if you invest these cash payments at a rate of 7%
3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank compounds interest at a 4 percent annual rate. A. How much do you need to deposit today in order to have a balance of $10,000 in 10 years? Explain and show your work. B. Suppose instead that you want to make equal payments in years 1 through 9 to accumulate $10,000 in year 10, how large must each of the 9 payments be? Explain. C. If your (very reliable) uncle were to offer to make the payments found in part (B) for you or to give you $7,000 one year from now, which would you choose? Explain. (Even if you could not solve for the answer in part B, please explain what criterion you would use to make the choice.)4. Capital Asset Pricing Model 4. Capital Asset Pricing Model In parts (A), (B), and (C) below assume that the risk-free interest rate is 3 percent and the market risk premium is 7 percent. A. Dorothy Inc. is considering a project that will generate after-tax annual cash flows of…
Both questions
If you deposit some money into a bank account today, to the nearest year, how long will it take to triple your deposit if it earns 32% annually? note: calculate to the nearest decimal. For example, if the answer is 12.56 years, then input your answer as 12.6
Give typing answer with explanation and conclusion

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