Excel format available in MyLab Finance. MyLab 5-1. (Power of Compounding) If you'd like to have $5,000,000 at retirement in LOT 45 years and you expect to earn 10 percent annually, which is around the average return over the past 50 years, what lump sum would you have to invest today? 5-2. (Compound interest) To what amount will the following investments accumulate?
Excel format available in MyLab Finance. MyLab 5-1. (Power of Compounding) If you'd like to have $5,000,000 at retirement in LOT 45 years and you expect to earn 10 percent annually, which is around the average return over the past 50 years, what lump sum would you have to invest today? 5-2. (Compound interest) To what amount will the following investments accumulate?
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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Excel format arvailable in MyLab Finance,
MyLab
5-1. (Power of Compounding) If you'd like to have $5,000,000 at retirement in LOT
45 years and you expect to earn 10 percent annually, which is around the average
return over the past 50 years, what lump sum would you have to invest today?
5-2. (Compound interest) To what amount will the following investments accumulate?
a. $6,000 invested for 12 years at 12 percent compounded annually
b. $7,500 invested for 8 years at 8 percent compounded annually
c. $6,400 invested for 10 years at 10 percent compounded annually
d. $22,000 invested for 6 years at 6 percent compounded annually
5-3. (Compound value solving for n) How many years will the following take?
a. $550 to grow to $1,049.50 if invested at 6 percent compounded annually
b. $37 to grow to $63.87 if invested at 9 percent compounded annually
c. $110 to grow to $398.60 if invested at 18 percent compounded annually
d. $56 to grow to $89.66 if invested at 3 percent compounded annually
5-4. (Compound value solving for r) At what annual rate would the following have to
be invested?
MyLab
a. $820 to grow to $1,988.12 in 13 years
b. $320 to grow to $423.10 in 6 years
C. $57 to grow to $290.30 in 18 years
d. $230 to grow to $576.60 in 5 years
5-5. (Present value) What is the present value of the following future amounts?
a. $805 to be received 10 years from now discounted back to the present at 10 percent
b. $376 to be received 5 years from now discounted back to the present at 5 percent
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