» In 1980 a couple invested 10,000 for 5 years at the rate of16% annually. During that time the rate of inflation is 5%compounded annually. How much money will he get in1985 and how much profit is realized over the 5 years?

Inflation means the general rise in prices of goods and services over time. It erodes the purchasing…

Answered: » In 1980 a couple invested 10,000 for…

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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3. You invest some amount today for two years that pays 6% annually. The bank compounds annually. At the end of the two years, you will have $150. What amount must you invest today?
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You have just received a windfall from an investment you made in a friend's business. She will be paying you $26,016 at the end of this year, $52,032 at the end of next year, and $78,048 at the end of the year after that (three years from today). The interest rate is 11.4% per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?
YOU ARE SAVING FOR A NEW HOUSE AND YOU PUT $1,000 PER YEAR IN AN ACCOUNT PAYING 25% COMPOUNDED ANNUALLY. THE FIRST PAYMENT IS MADE TODAY. HOW MUCH WILL YOU HAVE AT THE END OF 3 YEARS? Select one: a. 4761.625 b. 4766.625 c. 3025 d. 4765.63
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?
1. Zunio would like to buy his parents two return flight tickets to Seoul as their 37th wedding anniversary gift three years from now. The airfares is priced at RM3000 today. Inflation is expected to increase by 4% per year over a period of three years. How much must Janice deposit annually in an saving account paying 3% percent interest in order to have enough money to send her parents overseas three years later?
You want to be able to withdraw $25,000 each year for 20 years. Your account earns 10% interest. A.How much do you need in your account at the beginning? b) How much total money will you pull out of the account? c) How much of that money is interest?
A man wants to get from her bank account ¥26,265.58, 8 years from now. How much should he invest for three consecutive years (annually) starting this year if the interest rate is 0.243 (24.3%)?
You want to have $2,000,000 in net worth when you retire. To achieve this goal, you plan to invest $1,000 each year (starting one year from now) into an account of time that earns 10% interest rate compounded annually. The amount of time you can retire as a multimillionaire is how many years? 31.94 (32 years) 55.64 (56 years) 25.56 (26 years) 20.36 (20 years) detailed answer without the usage of excel
Suppose you borrowed $15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. How much would you still owe at the end of the first year, after you have made the first payment? $10,155.68 $10,690.19 $11,252.83 $11,845.09 $12,468.51

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» In 1980 a couple invested 10,000 for 5 years at the rate of 16% annually. During that time the rate of inflation is 5% compounded annually. How much money will he get in 1985 and how much profit is realized over the 5 years?