Liz and Bob just had a baby named Isabelle, and they want to save enough money for Isabelle to go to college. Assume that they start making monthly payments when Isabelle is 3 into an ordinary annuity earning 4.48%, and they calculate that they will need $25,200.00 by the time Isabelle turns 18. How much should they deposit every month so that they reach their goal? Deposit amount = Note: Your answer is a dollar amount and should include a dollar sign

Liz and Bob just had a baby named Isabelle, and they want to save enough money for Isabelle to go to college. Assume that they start making monthly payments when Isabelle is 3 into an ordinary annuity earning 4.48%, and they calculate that they will need $25,200.00 by the time Isabelle turns 18. How much should they deposit every month so that they reach their goal? Deposit amount = Note: Your answer is a dollar amount and should include a dollar sign

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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Tom and Sandy have set up a sinking fund in order to have $21,000.00 in 5 years for their child's college education. How much should be paid monthly into an ordinary annuity earning 7.46% compounded monthly so that they reach their goal? How much interest is earned during the last year? (Note: Your answer is a dollar amount and should include a dollar sign)
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?
When you were born, your dear old Aunt Minnie promised to deposit $1,000 into a savings account bearing a 5% compounded annual rate on each birthday, beginning with your first. You have just turned 22 and want the dough. However, it turns out that dear old (forgetful) aunt Minnie made no deposits on your third, fifth, and eleventh birthdays. How much is in the account right now?
Your grandma gave you $150 to start a college fund when you were born. This account earns 6% interest compounded yearly. Then, she gave you $10 in this account on each of your birthdays. Finally, you found a $20 bill on the ground on your 8th birthday that you also put into this account. How much much money is in this account on your 18th birthday (after your grandma made her deposit)? Do by formulas only pls, you may use excel to verify if you want.
John, a 25-year-old teacher, wants to start saving for his retirement. John wants a comfortableretirement, so he needs to have one million dollars in his saving account, which pays 2.4% annualinterest rate, when he reaches 67 years of age.a. How much should John deposit into his saving account monthly now? Round your answer to thenearest cent.b. If John wants the one million dollars in his saving account to last him 20 years into hisretirement, how much could he withdraw from the saving account monthly? You can assume thesaving account will pay the same 2.4% annual interest rate. Round your answer to the nearestcent.c. If John increases his monthly deposit in part (a) by $200, how much will be in his saving accountif he wants to retire at 60 years of age? Round your answer to the nearest cent.
Tom and Antonio both want to open savings accounts today. Tom wants to have $1,000 in his savings account six years from now. Antonio wants to have $1,000 in his savings account three years from now. Tom will need to deposit twice the amount of money today as Antonio. Select one: True False
Grandma Patt has decided to open a savings account for her newborn granddaughter. The savings account pays 3% interest. If Grandma Patt wants there to be $10,000 in the account in 18 years, how much should she deposit today? Assume no other deposits or withdrawals. a) $5,873.95 b) $17,024.33 c) $8,362.17 d) $10,609.23
Your cousin is currently 8 years old. She will be going to college in 10 years. Your aunt and uncle would like to have $95,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.3% per year, how much money do they need to put into the account today to ensure that they will have $95,000 in 10 years? The amount they need to put away today is $ (Round to the nearest cent.)
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
you have just won the lottery, and wish to ensure that will have $350,000 in 11 years to send your child to college. if your bank pays 4.46%, hours much must you deposit today to accumulate these funds?
Amanda and Zack are saving for their first child. They know he/she will be expensive and would like an extra $5000 in the bank when the baby comes. Amanda and Zack are not planning to have a baby for at least 3 years. They found a savings account that will earn 4.7% interest compounded quarterly. How much money should they invest to be financially prepared for their first child? Round to the nearest dollar.
Holly wants to have $220,000 to send a recently born child to college. She sets up a 529 plan and wants to know how much she must invest at the end of each year for the next 15 years if the funds can earn 4 percent. Use Appendix C to answer the question. Round your answer to the nearest dollar.$ If she can earn 5 percent, how much less will she have to invest each year? Use Appendix C to answer the question. Round your answer to the nearest dollar.$

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