Millet wants to provide a P200,000 graduation gift for her daughter Mae who is now 16 years old. She would like the fund to be available by the time she is 20 years of age. She decides on an investment that pays 10% compounded quarterly. How large must the deposit be? Select the correct response: Millet must deposit at least P136,000.00. Millet must deposit at least P135,000.00. Millet must deposit at least P138,000.00. Millet must deposit at least P137,000.00.

Millet wants to provide a P200,000 graduation gift for her daughter Mae who is now 16 years old. She would like the fund to be available by the time she is 20 years of age. She decides on an investment that pays 10% compounded quarterly. How large must the deposit be? Select the correct response: Millet must deposit at least P136,000.00. Millet must deposit at least P135,000.00. Millet must deposit at least P138,000.00. Millet must deposit at least P137,000.00.

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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Similar questions

Suzy wants to retire in 30 years. She expects to live 25 years after retirement. She prepares a savings plan to meet the objectives: First, after retirement she would like to be able to withdraw $20,000 per month. The first withdrawal will occur at the end of the first month after retirement. Second, she would like to leave her daughter a $500,000 inheritance. Lastly, she wants to set up a fund that will pay $5000 per month forever to her favorite charity after she dies. These payments will begin one month after she dies. All the monies earn 10% annual rate compounded monthly. How much will she have to save per month to meet these objectives? She wishes to make her first deposit from now and the last deposit on the day she retires.
Atita plans to gift $150,000 to her daughters as a gift in the future. She thinks it will help her daughter fulfil her dreams when she reaches her age to marry. Assume her daughter is 3 years old and may get married in her 20s. Assume that Atita has $30,000 and wishes to invest that in a financial asset with a 9% rate of return per annum. Required: How would you define the amount of $30 000 and $150 000 in terms of the time value of money? ANSWER a (i): (answer box will enlarge as you enter your response) How long will she have to wait until she reaches the goal of $150 000? ANSWER a (ii): Mark will receive $13,500 from his parent at the end of each year for five years. He plans to invest them in a financial asset with an interest rate of 7.5%. How much money…
Ann and Tom want to establish a fund for their grandson's college education. What lump sum must they deposit at a 10% annual interest rate, compounded quarterly, in order to have $50,000 in the fund at the end of 15 years? They should deposit $
Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $10,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit$200,000 (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn 6.00% per annum every year.
A friend of mine has a 22-year old daughter. He wants to give her a "$1,000,000 gift" for her college graduation present, with the caveat that she cannot have access to the gift for 45 years. Given that he invests in an asset that will earn 12% APR compounded annually, how much would he need to invest today?
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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