Ivanna wants to save money to buy a motorcycle. She invests in an ordinary annuity that earns 5.4% interest, compounded annually. Payments will be made at the end of each year. 2 How much money will she need to pay into the annuity each year for the annuity to have a total value of $6000 after 5 years? 6 ▷ Do not round intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. 9 A

Ivanna wants to save money to buy a motorcycle. She invests in an ordinary annuity that earns 5.4% interest, compounded annually. Payments will be made at the end of each year. 2 How much money will she need to pay into the annuity each year for the annuity to have a total value of $6000 after 5 years? 6 ▷ Do not round intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. 9 A

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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Brenda Young desires to have $20,000 eight years from now for her daughter’s college fund. If she will earn 4 percent (compounded annually) on her money, what amount should she deposit now? Use the present value of a single amount calculation. Use Exhibit 1-C. (Round time value factor to 3 decimal places and final answer to nearest whole number.)
Elizabeth has $17000 to invest. She requires $34000 for a down payment for a house. If she is able to invest at 8%, how many years will it be before she will accumulate the desired balance? Select answer from the options below 7 years. 9 years. 8 years. 6 years.
Sue plans to save $4765, $0, and $5419 at the end of Years 1 to 3, respectively. What will her investment account be worth at the end of the Year 3 if she earns an annual rate of 5.98 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Note: It is highly recommended to use Excel (or Google Sheets) or a financial calculator to solve this problem.
Can you show me how this is done? Ava Darling plans to buy a house in 10 years and needs $17,446 for a down payment. If the annual interest rate is 6%, how much does Ava Darling need to invest today to have $17,446 in ten years? Selected Answer: 15,469 Correct Answer: 9,742 ± 5
Without using Excel and using the formula, Cheryl is setting up a payout annuity and wishes to receive $1200 per month for 20 years. A. How much does she have to deposit if her money earns 8% interest compounded monthly? B. Find the total amount Cheryl will receive from her payout annuity.
Suppose that Kate is 45 years old and has no retirement savings. She wants to begin saving for retirement, with the first payment coming one year from now. She can save $20,000 per year and will invest that amount in the stock market, where it is expected to yield an average annual return of 5.00% return. Assume that this rate will be constant for the rest of her's life. In short, this scenario fits all the criteria of an ordinary annuity. Kate would like to calculate how much money she will have at age 60. Use the following table to indicate which values you should enter on your financial calculator. For example, if you are using the value of 1 for N, use the selection list above N in the table to select that value. Input Keystroke Output N Input Keystroke N Output I/Y Using a financial calculator yields a future value of this ordinary annuity to be approximately Kate would now like to calculate how much money she will have at age 65. Input Keystroke N Output Use the following table…
6) Susan is looking to purchase her first home five years from today. The house costs $1,550,000. She will have to make a down payment of 10% of this amount and plans to take a loan from the bank for the difference. Bank charges are approximately 15% of the loan amount. She plans to start saving from today to cover both the down payment and the bank charges. a. How much will she need to save to cover both the down payment and bank charges? b. If she currently has $195,000 in her account and will make no further deposits over the next five years, what rate of interest must she earn on this account in order to achieve the savings target calculated in part (a) above?
2. (a) A college student, Amy, decides to fund a retirement account with $2000 per year for 8 years, with the first deposit made one year from today. The rate of return will be 10%. How much will she have in her account when she retires in 40 years? (b) Amy’s friend, Dacio, decides he will start funding his retirement account 8 years from now (first payment in 9 years). He then will invest $2000 each year for 32 years. If his rate of return is 10%, how much will he have when he retires in 40 years?
Shenli would like to plan for retirement. With the help of a financial planner, she estimates that she will need $2,300,000 when she retires 40 years from now. Assume her investments produce returns of 10% per year. How much would Shenli need to save each year if she makes equal end of year deposits for the next 40 years that she works? Click here to access the TVM Factor Table calculator. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±5.
Mrs. Crawford will receive $9,250 a year for the next 14 years from her trust. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.If a 8 percent interest rate is applied, what is the current value of the future payments? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Jennifer Davis is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $28,000 for the down payment. If Jennifer can invest in a fund that pays 7.0 percent annual interest, compounded quarterly, how much will she have to invest today to have enough money for the down payment? (Round intermediate calculations to 6 decimal places, e.g. 2.512512 and final answer to 2 decimal places, e.g. 2,515.25.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Amount to be invested today
Laura needs to invest to help with her child's college fund. How much I would she have to invest to have $63,400 after 13 years, assuming an interest rate of 2.21% compounded monthly? Do not round any intermediate computations, and round your final answer to the nearest dollar. If necessary, refer to the list of financial formulas. $0

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