Question 10 of 13 The Mellows have decided to invest in a college fund for their young son. They invested $50,000 in a deferred annuity that will pay their son at the beginning of every month for 4 years, while he goes to college. If the account earns 3.00% compounded monthly and the annuity payments are deferred for 15 years, what will be the size of the monthly payments?

Question 10 of 13 The Mellows have decided to invest in a college fund for their young son. They invested $50,000 in a deferred annuity that will pay their son at the beginning of every month for 4 years, while he goes to college. If the account earns 3.00% compounded monthly and the annuity payments are deferred for 15 years, what will be the size of the monthly payments?

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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2. (a) A college student, Amy, decides to fund a retirement account with $2000 per year for 8 years, with the first deposit made one year from today. The rate of return will be 10%. How much will she have in her account when she retires in 40 years? (b) Amy’s friend, Dacio, decides he will start funding his retirement account 8 years from now (first payment in 9 years). He then will invest $2000 each year for 32 years. If his rate of return is 10%, how much will he have when he retires in 40 years?
What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $70,000 for their son's college fund in 13 years? (Round your answer to the nearest cent.) $
Aa.6
ANSWER ASAP THE SUBQUESTIONS
Assume that you own an annuity that will pay you $14,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $125,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? a. 11.20% b. 4.46% c. 4.87% d. 20.01% e. 5.90%
Ann and Tom want to establish a fund for their grandson's college education. What lump sum must they deposit at a 10% annual interest rate, compounded quarterly, in order to have $30,000 in the fund at the end of 10 years? Question content area bottom Part 1 They should deposit $enter your response here. (Round up to the nearest cent.)
WITH SOLUTION PLS Suppose you make an annual contribution of P8,698 each year to a college fund for a niece. He is 6 years now, and you will start next year and make the last deposit when he is 18. The fund is a money market account earning 5.29% per year. What will it be worth immediately after the last deposit?
You would like to give your son $70,000 towards his college education 12 years from now. How much money must you set aside today for this purpose if you can earn 8% on your investments? B. $176.271.91 C. $27.797.96 A. $12.250.00 interest rate, you will triple your money in ately D. $3,688.65 E. $14.211.11
What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $70,000 for their son's college fund in 13 years? (Round your answer to the nearest cent.) $
Assume that you own an annuity that will pay you $14,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $125,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? a. 11.20% b. 4.46% c. 4.87% d. 20.01% e. 5.90%
39. Problem 5.39 (Required Annuity Payments) 19 Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 4%. He currently has $235,000 seved, and he expects to earn 916 annually on his savings. How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest dollar $

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