Ho is now saving his money HK$2000 per month in a regular savings account of HSBC which offers him interest rate of 4%p.a. compound monthly. A bank teller suggest him to setup a monthly saving plan. The details are as follow Maturity of 5 years Fixed interest rate 8% p.a. compound quarterly A handling fee equivalent to 2% of the total investment amount for early withdrawal If he needs to use the money 4 years from now, should he take the offer?

Ho is now saving his money HK$2000 per month in a regular savings account of HSBC which offers him interest rate of 4%p.a. compound monthly. A bank teller suggest him to setup a monthly saving plan. The details are as follow Maturity of 5 years Fixed interest rate 8% p.a. compound quarterly A handling fee equivalent to 2% of the total investment amount for early withdrawal If he needs to use the money 4 years from now, should he take the offer?

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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Question

Ho is now saving his money HK$2000 per month in a regular savings account of
HSBC which offers him interest rate of 4%p.a. compound monthly. A bank teller
suggest him to setup a monthly saving plan. The details are as follow Maturity of
5 years Fixed interest rate 8% p.a. compound quarterly A handling fee equivalent
to 2% of the total investment amount for early withdrawal If he needs to use the
money 4 years from now, should he take the offer?

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Starting next year, you will need $5,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $5,000.) Your uncle deposits an amount today in a bank paying 7% annual interest, which will provide the needed $5,000 payments. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent.
PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULAS3.- Andres Rosas wants to know how much he must deposit today, so that in 5 years he will have the amount (FV) of 88,180.00, which he needs to pay for a trip, a) if the account pays 6.125% interest compoundable semiannually; b) if the account pays 7.65% compoundable monthly. The formula must be cleared to find the initial value (PV). Note:In the image, this is the original exercise, it is in Spanish, but it is easy to understand. Very important Note:It is necessary that you make a solution approach and then the result. Above all, to check the procedure and/or the formulas used, especially when you use excel. TO CONSIDER THE YEAR AS 360 DAYS (WHICH IS COMMERCIAL) (only if required)
Starting next year, you will need $15,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $15,000.) Your uncle deposits an amount today in a bank paying 5% annual interest, which will provide the needed $15,000 payments. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent. $
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