Problem 6-7 Calculating Annuity Values [LO1] You plan to deposit $5,200 at the end of each of the next 25 years into an account paying 10.3 percent interest. a. How much money will you have in the account in 25 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 50 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) X Answer is not complete. $ a. Future value of 25 deposits b. Future value of 50 deposits 41,956.81 X

Problem 6-7 Calculating Annuity Values [LO1] You plan to deposit $5,200 at the end of each of the next 25 years into an account paying 10.3 percent interest. a. How much money will you have in the account in 25 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 50 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) X Answer is not complete. $ a. Future value of 25 deposits b. Future value of 50 deposits 41,956.81 X

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 15 The 18,000-dollar present value of a certain annuity carries a payment amount that needs to be made indefinitely at 7.12% interest rate, compounded weekly. How much money should be paid regularly? A $23.18 B $24.65 C) $22.56 D) $20.93
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Problem 5-26 Calculating Annuity Present Values [LO 1] Beginning three months from now, you want to be able to withdraw $3,400 each quarter from your bank account to cover college expenses over the next four years. If the account pays 74 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Amount needed
5
Problem 6-41 Calculating Annuity Present Values [LO2] You want to borrow $87,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,550, but no more. Assuming monthly compounding. what is the highest rate you can afford on a 72-month APR loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Interest rate %
Chapter 10 Discussion Q2 A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What is the present value (PV) at time 0, given that the interest rate is 11%? Show your steps. A) $2695 B) $4312 C) $5390 D) $3234
QUESTION 4 Jamal wants to invest $4,300 in an account with an interest rate of 7.2% that is compounded CONTINUOUSLY. Which of the following choices will correctly calculate the amount of money in Jamal's account after 9 years? A. 7.2) 12x9 Amount = 4300 1+ 12 O B. Amount = 0.072x9xe4300 O C. Amount = 4300e0.072 × 9 12 x 9 D. 0.072 Amount = 4300 1+ 12 7.2 x 9 O E. Amount = 4300e O F. Amount = 4300x 7.2xe9
QUESTION 14 What’s the interest rate of a 8-year, annual $3,500 annuity with present value of $20,000? (Use a time value of money calculator or a spreadsheet. Round your answer to 2 decimal places.) ANNUITY INTEREST RATE %
Problem 5-10 Calculating Perpetuity Values [LO 1] The Maybe Pay Life Insurance Company is trying to sell you an investment policy that will pay you and your heirs $29,000 per year forever. Assume the required return on this investment is 7.5 percent. How much will you pay for the policy? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Policy value today

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