Question content area top Part 1 ​(Comprehensive problem)  You would like to have ​$   60,000 in   14 years.  To accumulate this​ amount, you plan to deposit an equal sum in the bank each year that will earn   6 percent interest compounded annually.  Your first payment will be made at the end of the year.   a.  How much must you deposit annually to accumulate this​ amount? b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should this​ lump-sum deposit​ be? ​ (Assume you can earn   6 percent on this​ deposit.) c.  At the end of five​ years, you will receive ​$   10,000 and deposit this in the bank toward your goal of ​$   60,000 at the end of year   14.  In addition to the​ lump-sum deposit, how much must you deposit in equal annual​ amounts, beginning in year 1 to reach your​ goal? ​ (Again, assume you can earn   6 percent on your​ deposits.)           Question content area bottom Part 1 a.  How much must you deposit annually to accumulate this​ amount?   ​$   enter your response here   ​(Round to the nearest​ cent.) Part 2 b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should the​ lump-sum deposit​ be?   ​$   enter your response here   ​(Round to the nearest​ cent.) Part 3 c.  If you deposit ​$   10,000 received at the end of five years in the​ bank, what will the amount grow to by the end of year   14​?   ​$   enter your response here   ​(Round to the nearest​ cent.) Part 4 In addition to the​ lump-sum deposit, how much must you deposit in equal annual​ amounts, beginning in year 1 to reach your​ goal?   ​$   enter your response here   ​(Round to the nearest​ cent.)

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
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Question content area top

Part 1

​(Comprehensive problem)  You would like to have ​$

 

60,000 in

 

14 years.  To accumulate this​ amount, you plan to deposit an equal sum in the bank each year that will earn

 

6 percent interest compounded annually.  Your first payment will be made at the end of the year.

 

a.  How much must you deposit annually to accumulate this​ amount?

b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should this​ lump-sum deposit​ be? ​ (Assume you can earn

 

6 percent on this​ deposit.)

c.  At the end of five​ years, you will receive ​$

 

10,000 and deposit this in the bank toward your goal of ​$

 

60,000 at the end of year

 

14.  In addition to the​ lump-sum deposit, how much must you deposit in equal annual​ amounts, beginning in year 1 to reach your​ goal? ​ (Again, assume you can earn

 

6 percent on your​ deposits.)

 

 

 

 

 

Question content area bottom

Part 1

a.  How much must you deposit annually to accumulate this​ amount?

 

​$

 

enter your response here

  ​(Round to the nearest​ cent.)

Part 2

b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should the​ lump-sum deposit​ be?

 

​$

 

enter your response here

  ​(Round to the nearest​ cent.)

Part 3

c.  If you deposit ​$

 

10,000 received at the end of five years in the​ bank, what will the amount grow to by the end of year

 

14​?

 

​$

 

enter your response here

  ​(Round to the nearest​ cent.)

Part 4

In addition to the​ lump-sum deposit, how much must you deposit in equal annual​ amounts, beginning in year 1 to reach your​ goal?

 

​$

 

enter your response here

  ​(Round to the nearest​ cent.)

 

 

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