Problem 3: Kate deposits P5,000 to her bank account every year when she was in high school for four years to prepare for her college degree. She took an engineering course and since then, she stopped depositing to her bank account. Right after graduation (she graduated on time), she got a job that pays P250,000 a year. If she continues to deposit to the same bank account P50,000 every year for 10 years, calculate the future worth after 30 years if the deposits are made at the end of each year and the bank pays 2% interest per year

Problem 3: Kate deposits P5,000 to her bank account every year when she was in high school for four years to prepare for her college degree. She took an engineering course and since then, she stopped depositing to her bank account. Right after graduation (she graduated on time), she got a job that pays P250,000 a year. If she continues to deposit to the same bank account P50,000 every year for 10 years, calculate the future worth after 30 years if the deposits are made at the end of each year and the bank pays 2% interest per year

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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When you were born, your grandparents put $5,000 in to a money market account to help with your college education. The bank gave them a guaranteed interest rate of 6% per year until you turned 18. How much money will be in the account on your 18th birthday if you never withdraw any money until that day? $11,417.20 $54,138.00 $1751.50 $14,271.50
Akeem Joffer hopes to a new cabin on Webb Lake in Maine. Akeem has $13,000 saved today and wants to save $7,000 every year for the next nine years. Assume Akeem can earn 11% on his investments. Compute the amount Akeem expects to have available to purchase the cabin in 9 years. 5. Reggie Hammond has $300,000 in cash located in a suitcase in the trunk of his car.Reggie deposits this amount in Gibraltar Bank. The bank offers a 6.7% annual rate and pays interest quarterly. Reggie hopes to have $1,600,000 at the end of five years. Compute the quarterly savings Reggie must deposit into this account in order to achieve his goal. 6. Billy Ray Valentine promises to pay his friend Louis Winthorpe a deferred annuity of $60,000 beginning in year five and continuing through year eleven plus a three-year deferred annuity of $7,000 that begins in year 15. Interest rate is 8.2 % . Compute the amount Billy Ray needs today to fulfill his obligation to his friend
To complete your last year in business school and then go through law school, you will need $5,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $5,000 one year from today). Your uncle offers to put you through school, and he will deposit in a bank paying 8.5% interest a sum of money that is sufficient to provide the four payments of $5,000 each. His deposit will be made today. Do not round intermediate calculations. Round your answers to the nearest cent. If your answer is zero, enter "0". How large must the deposit be? $ How much will be in the account immediately after you make the first withdrawal? After the last withdrawal? After the first withdrawal: $ After the last withdrawal: $
A man needs to set up a 529 colleges saving account for his granddaughter. How much will he need to deposit each year in order to have 80000 saved up for when she goes to college in 17 years, assuming the account earns 6% return.
Problem #1. Jason's uncle loaned him $26,560 to help start a landscaping business. They agreed that Jason would pay off the entire loan plus 3.24% annually compounded interest in 4 years, and that in the meantime he would make monthly deposits into a bank account to make sure that he has the amount needed when the loan comes due. The bank will pay 2.09%. (a) Find the total amount Jason will need to repay the loan. Show your work. (b) How much should each of his monthly deposits be? Show your work.
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
Margaret is planning to invest up to $22,000 in certificates of deposit at City Bank and People's Bank. She wants to invest at least $2000 but no more than $14000 at City Bank. The interest is 6% at City Bank and 7% at People's Bank. This is simple interest for one year. How much should she invest in each bank to maximize her income? What is the maximum income? y
Future value. Jack and Jill are saving for a rainy day and decide to put $40 away in their local bank every year for the next 20 years. The local Up-the-Hill Bank will pay them 6% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 20 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $400. Is there enough in the rainy-day fund to cover it? a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 20 years? $nothing (Round to the nearest cent.)
Your grandfather put some money in an account for you on the day you were born. You are now 16 years old and are allowed to withdraw the money for the first time. The account currently has $5,311 in it and pays an 11% interest rate. a. How much money would be in the account if you left the money there until your 25th birthday? b. What if you left the money until your 65th birthday? c. How much money did your grandfather originally put in the account? a. How much money would be in the account if you left the money there until your 25th birthday? If you left the money there until your 25th birthday, the amount in the account would be $ nearest cent.) (Round to the
An electrical engineer who is anticipating paying for his daughter’s college education plans to start depositing money now (year 0) and continue through year 17. If he deposits $5000 each year, how much will his daughter be able to withdraw each year starting in year 18 and continuing through year 22? Assume the account earns interest at 8% per year.
A friend asks to borrow $48 from you and return will pay you $51 in one year. If your bank is offering a 6.5% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $48 instead? b. How much money could you borrow today if you pay the bank $51 in one year? c. Should you loan the money to your friend or deposit it in the bank? D
A student wants to have $30,000 at graduation 4 years from now to buy a new car. His grandfather gave him $10,000 as a high school graduation present. How much must the student save each year if he deposites the $10,000 today and can earn 12% on both the $10,000 and his earnings? A) $ 3309 B) $ 4409 C) $ 5509 D) $ 6609

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