None Nancy just received a graduation gift of $10,000 from her grandparents. She'd like to invest the money, and once it has doubled invalue, use it for graduate school. She believes that she'll be able to earn a 10% compounded annual rate of return. What approach(es)can Nancy use to calculate how long it will take her money to double?O Solve for the number of periods.Use the Rule of 72.O Solve for the number of periods or use the Rule of 72.O Find the present value of a lump sum.

Following the Rule of 72, Nancy's $10,000 would double in value over about 7.2 years.

Answered: Nancy just received a graduation gift…

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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USE EXCEL TO SOLVE THE PROBLEM AND SHOW THE EXCEL FORMULA AS WELL! You are hoping to buy a house in the future and recently received an inheritance of $20,000. You intend to use your inheritance as a down payment on your house. a. If you put your inheritance in an account that earns a 7 percent interest rate compounded annually, how many years will it be before your inheritance grows to $30,000? b. If you let your money grow for 10.25 years at 7 percent, how much will you have? c. How long will it take your money to grow to $30,000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $30,000 if you move it into an account that pays 11 percent? d. What does all of this tell you about the relationship among interest rates, time, and future sums?
(Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows in the popup window: LOADING... . If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? a. What rate of return could Nicki earn on her money if she place it in annuity A with $7,000 payment per year and 10 years duration? nothing% (Round to two decimal places.) Help Me Solve ThisView an Example Get More Help Clear All Check Answer Data Table ANNUITY INITIAL PAYMENT INTO ANNUITY (AT t = 0) AMOUNT OF MONEY RECEIVED PER YEAR DURATION OF ANNUITY (YEARS) A $40,000…
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Justine is thinking about purchasing an investment from RCBC Capital. If she buys the investment, Justine will receive P1,000 every three months for two years. The first P1,000 payment will be made as soon as she purchases the investment. If Justine's required rate of return is 16%, how much should she be willing to pay for this investment? a.P1,368.57 b.P10,764.80 c.P1,345.60 d.P7,002.05
Carol wants to invest money in an investment account paying 10% interest compounding semi-annually. Carol would like the account to have a balance of $53,000 three years from now. How much must Carol deposit to accomplish her goal? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and PVA of $1).
PLEASE DO ALL PARTS OF THE QUESTION / PROBLEM
solve using the ba11 calculator,showing all steps Suppose Marsha plans to invest $1,000 at the end of each year for the next five years. She expects to earn 13 percent per year. (a). How much will Marsha have after 5 years? (b).How much would Marsha need to deposit today in order to have the same results?
Delfina has $27,730 in her savings account and wants this to accumulate to $80,000 for a condominium down payment. Suppose she plans to make deposits of $500 at the beginning of every month into this account which earns 3.31% compounded semi- annually. How long will it take to accumulate the $80,000? Choose calculator mode: Select an answer Enter the future value as a positive value in the FV box below. Enter PV and PMT as positive or negative values based on FV being positive. Report N as a whole number. P/Y = C/Y = N = I/Y = PV = $ PMT = $ FV = $ Report your answer in years and months as whole numbers below. Your answer must be consistent with the value of N you entered above whether correct or incorrect. This question will be marked using the value displayed in the N answer box above. If years is an exact integer like "7 years", then enter 7 for years and for months. You must enter a value in each box for full marks. It will take years and months.
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Tait is entering high school and is determined to save money for college. Tait feels he can save $2,500 each year for the next four years from his part-time job. If Tait is able to invest at 6%, how much will he have when he starts college? (Click the icon to view Present Value of $1 table.) E (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) E (Click the icon to view Future Value of Ordinary Annuity of $1 table.) - X Reference (Round your answer to the nearest dollar.) Reference When Tait starts college he will have Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Future Value of $1 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.840 0.961 0.924 0.888 0.855 0.823 0.792 0.951 0.906 0.863 0.822 0.784 0.747 0.917 0.909 0.893 | 0.877 0.870 0.862 0.847 0.833 0.826 0.797 0.769 0.756 0.743…
Amanda wants to take the next four years off work to travel around the world. She estimates her annual cash needs at $26,000 (if she needs more, she will work odd jobs). Amanda believes she can invest her savings at 12% until she depletes her funds. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) Read the requirements. (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Requirement 1. How much money does Amanda need now to fund her travels? (Round your answer to the nearest whole dollar.) With the 12% interest rate, Amanda needs Requirement 2. After speaking with a number of banks, Amanda learns she will only be able to invest her funds at 6%. How much does she need now to fund her travels? (Round your answer to the nearest whole dollar.) With a 6% interest rate, Amanda would need If Amanda's savings are earning a lower interest rate (6%),…

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