much of the value of the account can be attributed to the interest earned? 5)You want have $12,000 at the end of 6 years for the down payment on a house. If you can invest your money at 3.25% compounded month, what payment would have have to make into the account at the end of each month for the 6 years? Present Value of Ordinary Simple 6)What is the present value of an annuity if the payments of $800 L0004
much of the value of the account can be attributed to the interest earned? 5)You want have $12,000 at the end of 6 years for the down payment on a house. If you can invest your money at 3.25% compounded month, what payment would have have to make into the account at the end of each month for the 6 years? Present Value of Ordinary Simple 6)What is the present value of an annuity if the payments of $800 L0004
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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solve question 5 asap with explanation
Transcribed Image Text:Types of Annuities 1)ldentify the type of annuity and calculate the number of payments during the term: a. Karl pays $280.00 for a lease at
the beginning of every month for 3 years and 6 months at 7% compounded annually. b. Aida pays $1,000 at the end of every three months for
5 years and 9 months towards her student loan. At 4.5% compounded quarterly. c. Kapil receives $1,500 at the end of every month for 15
years from a retirement fund at 4% compounded semi-annually. Future Value Ordinary Simple 2)Suppose you open an account into which you
deposit $200 at the end of each month for 10 years. If the account pays 7.5% compounded monthly, how much will be in the account at the
end of the 10 year period? 3)An annuity is created by depositing $4,500 at the end of each quarter for 12 years at an interest rate of 4.75%
quarterly. What is the value of the annuity at the end of the 12 years and how much of the value is interest? 4)How much money should be in
an account if it earns 5.25% compounded monthly and deposits of $75 are made at the end of each month for 4 years and 6 months? How
much of the value of the account can be attributed to the interest earned? 5) You want have $12,000 at the end of 6 years for the down
payment on a house. If you can invest your money at 3.25% compounded month, what payment would have have to make into the account at
the end of each month for the 6 years? Present Value of Ordinary Simple 6)What is the present value of an annuity if the payments of $800
are made at the end of each quarter for 6 years and the investment earns 4.80% compounded quarterly?
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