n investment company pays 4% compounded semiannually. You want to have $11,000 in the future (A) How much should you deposit now to have that amount 5 years from now? (B) How much should you deposit now to have that amount 10 years from now?
n investment company pays 4% compounded semiannually. You want to have $11,000 in the future (A) How much should you deposit now to have that amount 5 years from now? (B) How much should you deposit now to have that amount 10 years from now?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 9EB: If you invest $15,000 today, how much will you have in (for further instructions on future value in...
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An investment company pays 4% compounded semiannually. You want to have $11,000 in the future
(A) How much should you deposit now to have that amount 5 years from now?
(B) How much should you deposit now to have that amount 10 years from now?
Expert Solution
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Step 1
Present Value can be calculated using PV function in excel
PV (rate, nper, pmt, [Fv], [type])
- Rate The interest rate
- Nper The total number of payments
- Pmt Payment per period
- Pv The present value
- Fv The future value
- Type The number 0 (zero) or 1 and indicates when payments are due.
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