neet EXERCISES All problems are available in MyLab Finance. E5-1 Assume that a firm makes a $2,500 deposit into a short-term investment account. If this account is currently paying 0.7% (yes, that's right, less than 1%!), what will the account balance be after 1 year? E5-2 If Bob and Judy combine their savings of $1,260 and $975, respectively, and deposit this amount into an account that pays 2% annual interest, compounded monthly, what will the account balance be after 4 years? Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a lump sum of $1.3 million now, or she can elect to receive $100,000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, which option should she take? E5-3
neet EXERCISES All problems are available in MyLab Finance. E5-1 Assume that a firm makes a $2,500 deposit into a short-term investment account. If this account is currently paying 0.7% (yes, that's right, less than 1%!), what will the account balance be after 1 year? E5-2 If Bob and Judy combine their savings of $1,260 and $975, respectively, and deposit this amount into an account that pays 2% annual interest, compounded monthly, what will the account balance be after 4 years? Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a lump sum of $1.3 million now, or she can elect to receive $100,000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, which option should she take? E5-3
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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Question E5-2
Transcribed Image Text:neet
EXERCISES
All problems are available in MyLab Finance.
E5-1
Assume that a firm makes a $2,500 deposit into a short-term investment account. If
this account is currently paying 0.7% (yes, that's right, less than 1%!), what will the
account balance be after 1 year?
E5-2 If Bob and Judy combine their savings of $1,260 and $975, respectively, and deposit
this amount into an account that pays 2% annual interest, compounded monthly,
what will the account balance be after 4 years?
Gabrielle just won $2.5 million in the state lottery. She is given the option of
receiving a lump sum of $1.3 million now, or she can elect to receive $100,000 at
the end of each of the next 25 years. If Gabrielle can earn 5% annually on her
investments, which option should she take?
E5-3
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