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has found a mutual fund that will earn 10 percent semi-annually. How much will Sar ay? What if Sarah is a finance major and learns how to earn a 15 percent annual ret she then retire?

has found a mutual fund that will earn 10 percent semi-annually. How much will Sar ay? What if Sarah is a finance major and learns how to earn a 15 percent annual ret she then retire?

Essentials Of Investments
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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Show your excel workings for the following problems. Round up to two decimal places if necessary. 1. Sarah would like to make a single investment and have 125 million at the time of her retirement in 11 years. She has found a mutual fund that will earn 10 percent semi-annually. How much will Sarah have to invest today? What if Sarah is a finance major and learns how to earn a 15 percent annual return - how soon could she then retire?
Transcribed Image Text:Show your excel workings for the following problems. Round up to two decimal places if necessary. 1. Sarah would like to make a single investment and have 125 million at the time of her retirement in 11 years. She has found a mutual fund that will earn 10 percent semi-annually. How much will Sarah have to invest today? What if Sarah is a finance major and learns how to earn a 15 percent annual return - how soon could she then retire?
Expert Solution
Step 1: Define = Time value of money

Money have time value and value of money change with time, Money today will not be same tomorrow.

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