At the end of each of the next 5 years, you will deposit the following amount into your savings account: Year Cash Flow $500 $600 2 3 $700 $900 $600 You expect interest rates to be higher in the future. Your best guess of what rates will be in the future is: Rate 1 year from now 10% Rate 2 years from now 11% Rate 3 years from now 12% Rate 4 years from now 13% If you forecast of interest rates is correct, how much money will you have 5 years from now? Hint: Find your balance at the end of each year. Round your answer to 2 decimal places, for example 100.12. 45

At the end of each of the next 5 years, you will deposit the following amount into your savings account: Year Cash Flow $500 $600 2 3 $700 $900 $600 You expect interest rates to be higher in the future. Your best guess of what rates will be in the future is: Rate 1 year from now 10% Rate 2 years from now 11% Rate 3 years from now 12% Rate 4 years from now 13% If you forecast of interest rates is correct, how much money will you have 5 years from now? Hint: Find your balance at the end of each year. Round your answer to 2 decimal places, for example 100.12. 45

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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You deposit $1.000 one year, $2000 next year and withdraw $1000 other year starting year I until year 30 with an interest rate of 5% one year., 6% next year, and 7% other year. How much money will you have at the end of year thirty if there are different interest rates as shown in the diagram belowe 1000 1000 1000 1000 26 28 29 30 2. 7% 5% 6% 7% 6% 7% S% 6% F? 1000 2000 1000 2000 2000 1000 2000 Select one: O a. 55698 O b. 45000 O c. 72333 O d. 56187 O e. 47566
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
Your.
Marsha Stone is thinking about investing $10,000 for a period of 1 year, 1 year from now, in an interest bearing security. Jamila, at the bank, is assisting her in choosing the appropriate investment. She pulls up the current interest rate data on her computer and lets Marsha has a look at it. A review of interest rates reveals as follows: Current 1-year rate = 2% p.a.Current 2-year rate = 4% p.a. Both Jamila and Marsha are confused with the information because though the interest rates for one and 2 year investments are available, the interest rate for a 1-year investment that will commence one year from now, is not there to see. Imagine that you are Jamila’s supervisor. How can you help the two ladies out? How much money will Marsha end up with when her investment matures? Show relevant calculations to support your response.Assume that Pure Expectations theory is valid.
To estimate when your money will be worth half of what it is worth today, divide 72 by the expected average annual rate of inflation. If the long-term annual rate of inflation is 3%, in how many years will your money be worth half of its current value? What if the average annual inflation rate increases to 4%?
Consider a dollar amount of $750 today, along with a nominal interest rate of 15.00%. You are interested in calculating the future value of this amount after 5 years. For all future value calculations, enter -$750 (with the negative sign) for PV and 0 for PMT. When calculating the future value of $750, compounded annually for 5 years, you would enter a value of 15 for 1/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded annually for 5 at the given nominal interest rate, yields a future value of approximately $1,508.52. When calculating the future value of $750, compounded semi-annually (twice per year) for 5 years, you would enter a value of 10 for N, a value of 7.50% for I/Y. 5 for N, a value of Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded semi-annually for 5 at the given nominal interest rate, yields a future value of $1,545.77. When calculating the future value…
Assume you can obtain an annual interest rate of 12% compounding monthly. You are going to invest $1,000 for two years. Over how many time periods will you be compounding your return? Group of answer choices 12 1 24 2
You are 19 years old today. You want to have $381,507.06 in an investment account when you are 60 years old. You will start with an initial deposit in one year from now and grow it by 3% per year for a total of 15 investments. How much is the amount of that initial deposit? Assume an interest rate (a.k.a. return on your investment of 6%. Use the $ sign and a comma and round to the nearest thousand...(e.g. $8,000 would be the form of a correct answer). Hint....the correct answer should be very close to a multiple of $1,000.
Assume you deposit $1,000 in your savings account. Performance a sensitivity analysis on the relationship between future value at the end of year 10 and interest rate. Plot the relationship on a chart and label the graph clearly
You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly? Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 1 120 240 240 i = 0.5% i= 6% A = 100 A = 100 Option C Option D F=? F=? 10 10 20 20 i= 0.5% i = 6% A = 100 A = 100 Question 4 Part B: Identify the correct Function Notation for this scenario. F = 100(P/A,0.5%,10)(P/F, 0.5%, 10) O F = 100(F/A,6%,120)(P/F, 6%, 120) O F = 100(F/A,0.5%,120)(F/P, 0.5%, 120) F = 100(F/A,6%,10)(F/P, 6%, 10) Question 4 Part C: Provide the final value for withdrawal at the end of year 20. Enter your answer in the form: 12345.67 Question 4 Part D: Choose the statement that is most correct…
Can u also answer part 2
4. If you receive $116 each month for 28 years and the discount rate is 0.08, what is the present value? (show the process and can use financial calculator)

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