interest rate at 5%? Your uncle Harry Potter started allotting P60,000 at the end of each year for 25 years. Oneyear after the saving period is over, your uncle withdrew P225,000 every year for 5 years.In addition, in the 6th and 7th years, uncle Harry withdrew P150,000 per year and in the8th year, he chose to withdraw the outstanding amount in his bank account. What was theamount of money he withdrew during the end of the 8th year if the stipulated interest rate

Future Value: The future value is the amount that will be received at the end of a certain period.…

Answered: interest rate at 5%?

Business

Finance

interest rate at 5%?

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

See similar textbooks

Related questions

Q: On May 1, 2021, Bo Smith, proud father of newborn son Bobo, purchased $200,000 in zero-coupon bonds…

A: Bonds are defined as financial instruments used by companies to raise additional funds from the…

Q: You already have $54,700 in your savings account that earns 3.50% compounded annually. You will…

A: Current amount (PV) = $54700 Quarterly deposit (P) = $2,820 Interest rate = 3.50% Quarterly interest…

Q: A company invest Php 100,000 today to be repaid in 5 years in one lump sum at 12 % compounded…

A: Annual interest compounding is a way of calculating and adding interest on a loan or investment once…

Q: 34. A sum of P1,000.00 is invested now and left for 8 years, at which time the principal is…

A: Solution : As given in question firstly we will invest the principal amount (P 1,000) for 8 year so…

Q: A portfolio is comprised of equal weights of two stocks labeled Stock X and Stock Y. The covariance…

A: Weight of stock A (WX) = 0.50 Weight of stock B (WY) = 0.50 Covariance between stock X and stock Y…

Q: Consider an index fund that contains the following four stocks: American Campus Communities,…

A: To Find: NAV on 30th march Number of shares of MRK purchased

Q: Felix Jones, a recent engineering graduate, expects a starting salary of $35,000 per year. His…

A: Solution : Due to averaged Increment in salary was 5% for last several years & interest rate was…

Q: A certain project has a payback of 8 years. The project will generate cash earnings after taxes as…

A: Pay back period is the amount of time required to recover Cost of investment. Payback period =Cost…

Q: Assume the possible stock prices of Hull Inc. are $150, $155, $160, $165, $170, $175, and $180. The…

Q: 29. For most early-stage ventures, there are no strong motives for having an equity component in…

A: Despite the challenging environment and learnings capabilities, early stage ventures generally have…

Q: The citizens of a geographic area of the National City authorized a special assessment to be imposed…

A: Given is the information regarding the people of an area of the National city.

Q: The King Carpet Company has $2,910,000 in cash and a total of $12,780,000 in current assets. The…

A: The plan to reduce cash would have impact on both current assets and current liabilities which would…

Q: Ozzy Osbourne plans to open a regional competitor to Amtrak and he took out a small loan to get…

A: We can use the concept of time value of money here. The concept of time value of money states that…

Q: What will be the nominal RoR on a perpetual preferred stock with a $100 par value, a stated dividend…

A: Par value = $100 Dividend rate = 7% Annual dividend = 100*0.07 = $7

Q: A company is evaluating a new 4-year project. The equipment necessary for the project will cost…

A: Initial cost of the project = $2,900,000 Salvage value = $ 655,000 Dpreciation method = 5-years…

Q: uppose that certain operati xpenditures were expected to be t the end of the first months, $1000 at…

A: In arithmetic increasing annuity there is increase of fixed amount of increase at each period of…

Q: Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock currently…

A: As per Bartleby honor code, when multiple questions are asked, the expert is required only to solve…

Q: insurance is relevant to the public an

A: Insurance is an agreement between two parties in which the insurer should pay money against which…

Q: 3. Why is the initial value of a futures contract zero? a. impossible to tell b. the futures…

A: Answer:- c. You do not pay anything for it. EXPLANATION:- A futures contract is an agreement between…

Q: A contractor imported a bulldozer for his job, paying Ph 250000 to the manufacturer. Freight and…

A: Depreciation is an accounting term for a method of allocating a tangible or physical asset's cost…

Q: Suppose you buy a futures contract at $150. If the futures price changes to $147, what is its value…

A: In mark to market, futures contracts are settled daily to show the profit/loss in a trade

Q: Solved Manually. Taylor Swift, a college student of USeP decides to get a student loan amounting to…

A: Loan amount = $4000 Interest rate = 5% Monthly interest rate = 5%/12 = 0.416666666666667% Monthly…

Q: Ratio Analysis A. Chen Company has current assets equal to P5,000,000. Of these, P1,000,000 is cash,…

A: Solution :1 Current Ratio : Current Assets / Current Liabilities Current Ratio…

Q: How does the following contributed to capital market a) Information disclosure b)Liberalisation…

A: A financial market seems to be a place where consumers trade financial securities including bonds,…

Q: Assume that you are 21 and that you will retire in 50 years at age 70. Assume two different saving…

A: Scenario 1: Payments "PMT" of $1200 is made in the savings account for 10 years at a rate "r" of…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: Loan mortgage and discount points: A discount point with respect to mortgages refers to payments…

Q: (Margin Purchase and Selling Short) You are very optimistic about the personal computer industry, so…

A: Margin purchase is the strategy of borrowing funds from a bank or a broker to buy stocks. Short…

Q: 23. Amanda deposited $5, 600 into a savings account that earns 3.5% interest compounded daily. Find…

A: The future value of the deposit can be calculated with the help of future value function. The…

Q: To help purchase his new minivan, Ahmad is taking out a s26,000 amortized loan for 6 years at 5.2%…

A: Given:

Q: Lisa Loeb is considering buying 100 shares of CMA Record Company. The price of the shares is $52.…

A: An investor is not allowed to trade with securities exchanges directly as orders needs to be placed…

Q: Analysts expect Exxon Mobil stock to pay a dividend of $3.43 in 1 year and is expected to sell for…

A: Expected dividend of Stock in year 1(D1) = $3.43 Expected Selling Price of Stock in year 1(P1) =…

Q: Assess One of the companies is a project to build housing units with an estimated investment volume…

A: Payback period is the period in which a project paybacks its initial investment from the expected…

Q: Jingle Bells’ bonds are being sold for $980.80, and their coupon rate is 6%, with annual payments.…

A: Bond is the debt security that investors uses to reduce the risk and increase stable return from…

Q: G. R. Edwin Inc. had sales of $5.88 million during the past year. The cost of goods sold amounted to…

A: Tax liability is the amount of tax that a firm/individual needs to pay to the Government on its…

Q: Q4. A project costing $6,200 initially should produce cash inflows of $2,860 per year at the end of…

A: Given: Year Particulars Amount 0 Initial investment -$6,200 1 Cash inflows $2,860 2 Cash…

Q: 4. What is the equivalent amount today of an annual deposit of Php200000 for 15 years if money is…

A: Solution : Equivalent amount today of annual deposit means that amount which was represent the…

Q: otse Automotive is planning to expand its operation by planning to add a machine costing $90.000.…

A: Solution : Company Will choose Loan V/S Lease option which provide the lower Negative option.

Q: When Christian bought his home, he borrowed $315,700 at 4.2% interest, compounded monthly for 25…

A: Loan amount (PV) = $315,700 Interest rate = 4.2% Monthly interest rate (r) = 4.2%/12 = 0.35% Period…

Q: Which is Idemenity Plan and which is Managed Care Plan? Insureds create contract with an insurer…

A: Only managing the funds, not about financial planning. Financial planning also includes the steps…

Q: Determine the simple payback period of a ₱20,000 with return of 5,000 on year 1; 8,000 on year 2 and…

A: Payback period is the period within which initial investment is recovered. Payback period Formula…

Q: Erika inherits $20,000, and decides to invest it in an account earning 6.25% interest, compounded…

A: Formula Future value = PV*(1+i)n Where PV - Investment i.e. $20,000 i - Semi annual interest rate…

Q: You buy a $500Ok home with a 10% down payment at a 3% mortgage rate. If home prices decline 5% ner…

A: Home equity refers to the difference between the value of the home and how much a person owes as a…

Q: Your company must make a $326,000 balloon payment on a lease 2 years and 9 months from today. You…

A: Balloon payment needed = $326000 n = 2 years 9 months = 11 quarters r = 4% per year = 1% per quarter…

Q: Use and example to describe how you would analyse past performance, recognise opportunities and plan…

A: Performance analysis is referred as the specialized discipline, which provides the individuals and…

Q: State of Economy Probability ABC Company Expected Return Expected Return XYZ Company Very Poor 0.30…

A: Solution : Co-Variance is calculated as follows. Co-Variance : Dx * Dy / N…

Q: Omega company has the following capital structure as at 31st December 2020: Ordinary share…

A: Here; We have Dividend paid now D0 is @ per share Growth rate is 10% Current share price is sh. 20…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: Terminal cash flows is the cash flow generated from termination or end of project. It will be…

Q: The Mitchem Marble Company has a target current ratio of 2.1 but has experienced some difficulties…

A: The current ratio is calculated as ratio of current assets and current liabilities. Any increase in…

Q: D9 A stock has an initial value of $7, and can go up by 1.2 or down by 0.7, the risk free rate is…

A: Spot price (SP) =$7 Exercise price (EP) = $6 Expected future spot price (lower limit)on expiry date…

Q: Suppose the economy contains two risk factors: the GDP growth rate and the interest rate. Experts…

A: Three factor model to calculate rate of return on a stock Under this model, risk free rate is…

Question

interest rate at 5%?

Your uncle Harry Potter started allotting P60,000 at the end of each year for 25 years. One
year after the saving period is over, your uncle withdrew P225,000 every year for 5 years.
In addition, in the 6th and 7th years, uncle Harry withdrew P150,000 per year and in the
8th year, he chose to withdraw the outstanding amount in his bank account. What was the
amount of money he withdrew during the end of the 8th year if the stipulated interest rate

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step by step

Solved in 6 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Victor has been consistently withdrawing money from his savings account for several years. If he withdrew $19500.0 every year for 7 years, and interest rate was 0.075 compounded annually, what was his original investment at time zero to enable these payments. At the end of 7 years his account balance was zero. Your Answer:
Luke deposited $3500 into a savings account that earns 5.50% annually but is compounded 4 times per year. He plans to leave the funds in the accounts for 3.50 years. However, at the end of 1.50 years, Luke has to withdraw $1000. What amount will be in the account at the end of the original 3.50 years
Mr. Angel deposited 125,000 in Coconut Bank. After 2 years, he withdrew 13,600. After another 2 years, he again withdrew 9,500. If he wishes to withdraw all his savings after 5 years from the time of his deposit, what amount will he receive if the interest rate is 9% compounded quarterly?
1. Engr. Secula started saving ₱2000.00 each year for 25 years until his retirement at 65years old. A year after he retired, he withdrew ₱10000.00 for a period of 5 years. In the ninth and tenth years, he decided to only withdrew ₱5000.00 per year. In the twelfth year, he withdraws the remaining money in his account. If the interest rate was 9% per year: a) Draw the Cash flow diagram with function symbols. b) What was the final withdrawal from his account?
Bob has deposited $10,000 at the end of each year into a saving account for the last 12 years. His deposits earned interest at 4% for the first 4 years; at 5% for the next 3 years; and at 6% for the last 5 years. (a) What is the accumulated value in his saving account at the end of year 4? (b) What is the accumulated value in his saving account at the end of year 7? (c) What is the accumulated value in his saving account at the end of year 12? (d) What is the total interest earned for the 12 years?
Patricia French received $500,000 from aninsurance company after her husband’s death. Patricia wants to deposit this amount in a savings accountthat earns interest at a rate of 5% compoundedmonthly. Then she would like to make 120 equalmonthly withdrawals over the 10-year period suchthat, when she makes the last withdrawal, the savingsaccount will have a balance of zero. How much canshe withdraw each month?
On the day his son was born, a father deposited to a trust company a sufficient amount of money so that his son could receive money in the future. There was a provision that the son can withdraw an amount of P10,000 each year for 3 years starting on his 18th birthday and P15,000 eight months after the last withdrawal. The interest rate is 5% compounded monthly. How much money can he receive on his 18th birthday, if he decided to withdraw all the money at once?
Eugene began to save for his retirement at age 26, and for 10 years he put $ 425 per month into an ordinary annuity at an annual interest rate of 9% compounded monthly. After the 10 years, Eugene was unable to make the monthly contribution of $ 425, so he moved the money from the annuity into another account that earned 8% interest compounded monthly. He left the money in this account for 29 years until he was ready to retire. How much money did he have for retirement? Retirement amount =
Kate deposited P5,000 to her bank account every year when she was in high school for four years to prepare for her college degree. She took an engineering course and since then, she stopped depositing to her bank account. Right after graduation (she graduated on time), she got a job that pays P250,000 a year. If she continues to deposit to the same bank account P50,000 every year for 10 years, calculate the future worth after 30 years if the deposits are made at the end of each year and the bank pays 2% interest per year. *Please show your correct and complete solutions to this problem. Thank you!*
Your uncle has $298,000 invested at 7.7%, and he now wants to retire. He wants to withdraw $35,000 at the end of each year, beginning at the end of this year. He also wants to have $25,000 left to give you when he ceases to withdraw funds from the account. What is the maximum number of $35,000 withdrawals that he can make and still have at least $25,000 left in the account? (Hint: If your solution for N is not an integer, round down to the nearest whole number.) Group of answer choices 12 11 13 15 16
Eugene began to save for his retirement at age 24, and for 12 years he put $ 375 per month into an ordinary annuity at an annual interest rate of 9% compounded monthly. After the 12 years, Eugene was unable to make the monthly contribution of $ 375, so he moved the money from the annuity into another account that earned 5% interest compounded monthly. He left the money in this account for 29 years until he was ready to retire. How much money did he have for retirement?
Supposed 30 years ago your mother deposited $1,400 in an investment account earning 6.0% per year. After 9 years she withdrew $434. There were no additional deposits or withdrawals from the account. Obtain today's value of the investment account.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS