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Question 1: Assume you deposit $700 every three months at a 6 percent annual rate, compounded quarterly. How much will you have at the end of 20 years?

Question 1: Assume you deposit $700 every three months at a 6 percent annual rate, compounded quarterly. How much will you have at the end of 20 years?

Essentials Of Investments
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 1: Assume you deposit $700 every three months at a 6 percent annual rate, compounded quarterly. How much will you have at the end of 20 years? Question 2: You borrow a five-year $13,000 loan with monthly payments of $250. What is the annual percentage rate (APR) on the loan? Question 3: How much would you have to invest today to receive $50,000 in 10 years at 9.5 percent per year? Question 4: Ms. Nelson will receive $12,000 a year for the next 20 years from her retirement fund. If a 6 percent interest rate is applied, what is the current value of her retirement fund? Question 5: Assume you deposit $2,000 every six months at 10 percent compounded semi-annually. How much will you have at the end of 10 years? Question 6: If you need $40,000 for your son's education in 10 years, how much must you deposit at the beginning of each year in the bank earning 6 percent in order to have the college money ready? Question 7: If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out each year if you want nothing left at the end of 8 years? Question 8: You borrow S6,000 at a 10 percent annual rate to be repaid in 3 equal payments at the end of each of the next 3 years. How large is the total interest payment over the three years?
Transcribed Image Text:Question 1: Assume you deposit $700 every three months at a 6 percent annual rate, compounded quarterly. How much will you have at the end of 20 years? Question 2: You borrow a five-year $13,000 loan with monthly payments of $250. What is the annual percentage rate (APR) on the loan? Question 3: How much would you have to invest today to receive $50,000 in 10 years at 9.5 percent per year? Question 4: Ms. Nelson will receive $12,000 a year for the next 20 years from her retirement fund. If a 6 percent interest rate is applied, what is the current value of her retirement fund? Question 5: Assume you deposit $2,000 every six months at 10 percent compounded semi-annually. How much will you have at the end of 10 years? Question 6: If you need $40,000 for your son's education in 10 years, how much must you deposit at the beginning of each year in the bank earning 6 percent in order to have the college money ready? Question 7: If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out each year if you want nothing left at the end of 8 years? Question 8: You borrow S6,000 at a 10 percent annual rate to be repaid in 3 equal payments at the end of each of the next 3 years. How large is the total interest payment over the three years?
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