QUESTION 3Discuss the meaning of "the present value of a future amount"? Give the generalequation for present value?a.Farizal intends to buy a new car, the Myvi for RM57,650, but only has RM20,000 incash. How many years will it take for RM20,000 to grow to RM57,650 if it is investedat 10% interest compounded annually?b.Wahida has decided to invest RM1,000 for two years in a savings account paying6% interest compounded semi-annually. Compute the future value of Wahida'sinvestment?C.d.Sharifah Aminah receives a mixed stream of cash flows from an investment over thenext five years:YearCash Flow (RM)5,0006,5004,5005,2005,8001What is the initial amount that Sharifah Aminah should invest if the required return is10%?2345

Money grow by the time and interest rate and future value of money is more than what today due to…

Discuss the meaning of "the present value of a future amount"? Give the equation for present value? Farizal intends to buy a new car, the Myvi for RM57,650, but only has RM20 cash. How many years will it take for RM20,000 to grow to RM57,650 if it is it at 10% interest compounded annually? Wahida has decided to invest RM1,000 for two years in a savings account 6% interest compounded semi-annually, Compute the future value of W

Discuss the meaning of "the present value of a future amount"? Give the equation for present value? Farizal intends to buy a new car, the Myvi for RM57,650, but only has RM20 cash. How many years will it take for RM20,000 to grow to RM57,650 if it is it at 10% interest compounded annually? Wahida has decided to invest RM1,000 for two years in a savings account 6% interest compounded semi-annually, Compute the future value of W

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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Future value with periodic rates. Denise has her heart set on being a millionaire. She decides that at the end of every year, she will put away $4,800 into her "I want to be a millionaire account" at her local bank. She expects to earn 6.5% annually on her account. a. How many years must Denise faithfully put away her money to succeed at becoming a millionaire? b. If Denise switches to a monthly savings plan and puts one-twelfth of the $4,800 away each month ($400), how much will she have in 43 years at the 6.5% APR? c. Why is the future value under the monthly savings plan more than the $1,000,000 goal?
Suppose a husband wants to take his wife on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $20,000 inheritance from an uncle and intends to invest it for the trip. The husband estimates the trip will cost $26,600. What interest rate, compounded annually, must be earned to accumulate enough to pay for the trip? Note: Use tables, Excel, or a financial calculator
En Sahak wants to buy a new boat in 7 years. He expects the new boat will cost RM28,000. En Sahak has RM18,000 in an investment account today. What rate of return must En Sahak earn on his investments to be able to buy the boat on time?
PLEASE ANSWER THIS APPLICATION OF FIRST ORDER DE (REFRAIN FROM GIVING ME A SOLUTION IN AN ACCOUNTING WAY) TIA! After receiving his first income, Juan dela Cruz invested 20,000 in a bank for his future family. The annual interest rate in his investment is 10 % - compounded interest such that the interest of his investment also gets an interest. a. What is the growth rate, k? b. How much will he have after 10 years? c. Approximately after how many years will his money double?
You want to purchase a new car and you are willing to pay $20,000. If you can invest at 10% per year and you currently have $15,000, how long will it be before you have enough money to pay cash for the car?
Use a financial calculator or computer software program to answer the following questions: a) Melanie is trying to save money for retirement and has a future goal of $750,000 at the end of 20 years. Determine the present value of her goal using a discount rate of 12%. b) How would the present value change if the $750,000 is to be received at the end of 15 years instead? Explain the impact and show your work?
I need help working this problem out. Figuring out what table to use, whether to use: compound value, present value, amount of annuity, present value of annuity, sinking fund value? Please explain in detail each step. Nina deposits $3400 into a savings account earning simple interest at 6.3% annually. She intends to leave the money in the bank for three years. How much money, including both principal and interest, can she withdraw at the end of this time?
It has been proposed that in order to retire with the same lifestyle you currently have, you will need to have at least 1.5 million dollars saved by retirement. How much would you have to invest right now in order to achieve your goal? Assume you can find an investment that pays 5.6% compounded monthly. You're current age is 30 and youwould like to retire in 35 years. 2. What interest rate would you need in order to reach this goal if you had $8000 to invest?
One year ago, Sinem deposited $80,000 in her investment account for the purpose of buying a flat fuve years from today. Today she is adding another $20,000 to her account. She plans on making a final deposit of $35,000 to the account one year from today. If the interest rate is 10% how much cash will be available in her investment account when she is ready to buy the flat? (Round 2 decimal places e.g 18.64)
Franco wants to accumulate P150,000 in order to make the down payment for a new car. He plans to invest P25,000 every start of the year, how long would it take him to have enough money to make the down payment if the interest rate is 8%? Use two decimal points.
Roxanne plans on going on vacation to Europe in four years. The trip will cost $4,000. She proposes to finance the trip by investing a sum of money now at 8% compounded annually. How much should Roxanne invest now in order to obtain her goal of $4,000? Answer the following questions: Fill in the factor that you used to solve the problem : How much should Roxanne invest now in order to obtain her goal (round up to the nearest dollar)?

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