David Lynch needs $20,000,000 to start shooting his new feature film, Ronnie Rocket. He can invest $5,000,000 from his own pocket. To get the remaining $15,000,000, his manager, Ari Gold, is trying to find a co-producer or an investor who is willing to lend but no one volunteers as his films are perceived to be too risky compared to usual Hollywood projects. Hence, Mr. Gold advises Mr. Lynch to deposit his $5,000,000 into a savings account with an interest rate of 6% per year (annually compounding) until he accumulates the necessary $20,000,000. How long should Mr. Lynch wait until he can start shooting Ronnie Rocket? Solve this problem using Time Value of Money equations and be sure to show all of your vork.

David Lynch needs $20,000,000 to start shooting his new feature film, Ronnie Rocket. He can invest $5,000,000 from his own pocket. To get the remaining $15,000,000, his manager, Ari Gold, is trying to find a co-producer or an investor who is willing to lend but no one volunteers as his films are perceived to be too risky compared to usual Hollywood projects. Hence, Mr. Gold advises Mr. Lynch to deposit his $5,000,000 into a savings account with an interest rate of 6% per year (annually compounding) until he accumulates the necessary $20,000,000. How long should Mr. Lynch wait until he can start shooting Ronnie Rocket? Solve this problem using Time Value of Money equations and be sure to show all of your vork.

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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