Ms. Pan Aram has set the goal of accumulating Php 4,000,000 for her son's college fund, which will be needed 18 years in the future. Her investment agent advises her that she can deposit today to Bank X that earns 8% annual interest. a. Option A: How much she needs to deposit today in the bank? b. Option B: If she will be depositing an equal payment of Php 107,000 per year for 18 years at 8% annual interest, how much is the future value? c. Which is the better option Ms. Pan should decide? Why?

Ms. Pan Aram has set the goal of accumulating Php 4,000,000 for her son's college fund, which will be needed 18 years in the future. Her investment agent advises her that she can deposit today to Bank X that earns 8% annual interest. a. Option A: How much she needs to deposit today in the bank? b. Option B: If she will be depositing an equal payment of Php 107,000 per year for 18 years at 8% annual interest, how much is the future value? c. Which is the better option Ms. Pan should decide? Why?

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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if her dad deposits R3570,00 at the end of every six months for the next four years into a bank account. The account pays 8,5% interest per annum, compounded semi-annually. Her father pays and additional R5550,00 into the account for every R3570,00 deposit he makes. The first deposit will be made six months from now. How much money will there be in the account for Aziz to pay for her college expenses?
A man has deposited ₱50 000 in a retirement income plan with a local bank. This bank pays 9% per year, compounded annually, on such deposits. What is the maximum amount the man can withdraw at the end of each year and still have the funds last for 12 years?
Tess wanted to have P100,000 on her bank account at the end of 8years. She plans to deposit an amount at the beginning of each month at an interest rate of 3.5% compounded quarterly.a.What is her monthly deposits?b.What is the present worth of these deposits?
Starting next year, you will need Php120,000 annually for three years to complete your education. (One year from today you will withdraw the first Php120,000.) Your uncle deposits an amount today in a bank paying 5% annual interest (net of all charges and fees), which will provide the needed Php120,000 payments. 1) How large must the deposit be? 2) How much will be in the account immediately after you make the first withdrawal?
Your friend already has $20,000 in an investment account. In addition to this amount, she is considering investing $5,000 at the end of year 1 with this amount growing at 6% p.a. until the end of year 5. If the interest rate earned by the investment account is expected to be 8% p.a., the total amount she will have accumulated in this account at the end of five years is closest to: Group of answer choices $29,387. $32,776. $62,162. $66,120.
Ethan is creating a college investment fund for his daughter. He will put in $21,000 per year for the next 17 years and expects to earn a 12% annual rate of return. How much money will his daughter have when she starts college? Use Appendix C to calculate the answer. Multiple Choice $1,014, 538 $1,015,551 $1,027,291 $1,026,564
Syariqul Haq is trying to save up for a big vacation. He plans to take a trip around Japan when he graduates in four years. If he can earn 8 percent return on investment semiannually, calculate the amount that he needs to deposit every year to have RM10,000 upon his graduation. (b) Hakimi borrow RM15,000 education loan from Maybank. Payments are being made in instalments at the end of each year. He borrows for 10 years at an interest rate 5 percent per annum. Calculate the amount that Hakimi has to payback for every year.
Sally enters into an investment that will guarantee her 5% year if she deposits $2045 each year for the next 10 years. She must make the first deposit one year from today. How much will she have when she makes her last payment 10 years from now? (Please use excel function = FV) to solve
Maria wants to have ₱750,000.00 at the end of 4 years for her graduation expenses. She plans to deposit a certain amount at the end of each month to achieve this. Her bank pays 15% compounded monthly.What is the monthly rate? What is the total number of deposits?
Mr k manu is planning towards his child’s university education. He has therefore decided to make periodic contributions towards that. If he deposits 2000 at the end of every year into a special account for seven years and the bank pays 15% per annum as interest on such deposits,how much will the deposit grow to at the end of the 7th year?
William Jack and Sophia Rose are planning on their first child education. If they expect that college will cost RM150,000 per year in 18 years, calculate how much should the couple begin depositing annually at the end of each of the next 18 years to accumulate enough funds to pay one year of tuition 18 years from now. Assume they can earn a 6% annual rate of returm on their investment.
To pay his university education, Mr. Ahmed is saving $ 1000, at the beginning of each year for the next 7 years in a Bank Muscat account paying 10% interest rate. How much will Mr. Ahmed have in that account at the end of 7th year? Mr. Ahmed need $ 17000 to pay his university fees in future, justify your suggestion to him regarding his investment in Bank Muscat?

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