Note: To fully answer this question, the use of numerical approximation methods is required. Aspreadsheet may be useful too.Robert has struck an agreement to buy his dad's car. The sale takes place when Robert can pay thedepreciated value of the car.The car is valued at $38,000 today but loses 0.5% in value each month due to depreciation.Robert starts a regular savings plan to buy the car and plans to invest $100 at the end of each monthinto an account that earns him 0.25% per month.(a) Calculate, to the nearest month, how long Robert must wait before he can buy the car?(b) Robert wants to have the car in ten years and so he searches for a bank account that can paya higher interest rate. What is the minimum rate he must look for to achieve his goal?(c) The best offer rate Robert can find is 0.8% per month, but he is determined to get the car. Heplans to revise his monthly savings amount. Calculate the minimum this has to be to achievehis goal.

Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful…

Answered: Robert has struck an agreement to buy…

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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Marty decides to purchas a paddlewheel boat to start a riverboat casino business. The boat costs one million dollars. He acquires a 10 year loan that has an annual interst rate of 2.5%, compounded weekly. What are the weekly payments on this loan? After one year, due to a donation by a silent partner, Marty is able to pay off the remainder of the loan. How much will this be?
Deborah is planning to buy a car in 3 years. She intends to buy the best car she can for $20 000. She has $17 500 to invest in an account that compounds interest semi-annually. What rate of interest will Deborah need in order to meet her goal?
John borrowed P4500 cash from his friend. His friend's condition is that he must pay his debt in 2 years with an interest of 3% one time payment only. However, john plans to set aside an amount of money in his piggy bank every 3months with an interest of 4% compounded quarterly until he can accumulate the total debt and pay it one time to his friend. How much money must John set aside every 3months?
Jenny and Leo plan to purchase a new house and the couple is able to obtain a 25-year 3.6% (per annum, compounded monthly) amortised loan but they must put down 20% deposit. The loan requires end-of-month repayments of $2,500 where the first payment is due a month after the loan is taken. Assuming that the couple has enough savings for the down payment, what is the cost of the house that they want to purchase? a. 494,068.50 b. 2,470,342.49 c. 750,000 Od. 617,585.62
Karl Yates needs $6,000 to pay for the remodeling work on his house. A contractor agrees to do the work in 10 months. How much should Karl deposit at 6.9% in order to accumulate the $6,000 by that time? Karl should deposit $ (Round to the nearest cent.)
George Robinson is a high school sophomore. He currently has $7,500 in a savings account that pays 5.97 percent annually. George plans to use his current savings plus what he can save over the next four years to buy a car. He estimates that the car will cost $12,545 in four years. How much money should George save each year if he wants to buy the car? (Round factor values to 6 decimal places, e.g. 1.521253 and the final answer to 2 decimal place e.g. 15.25.) George should save $
Stephen plans to purchase a car 4 years from now. The car will cost $35,175 at that time. Assume that Stephen can earn 7.38 percent (compounded monthly) on his money. How much should he set aside today for the purchase? Round the answer to two decimal places.
Ms. Brown purchases a house for $300,000. She borrows $200,000 from a mortgage company at the rate of 4.5%. Consider interest paid on the loan as only cost of borrowing to Ms. Brown. She rent the property for $2,000 a month. She pays $6,000 property tax per year. The house maintenance costs each year is about $3,000. After 5 years she sells the property for $400,000. What is Ms. Brown’s average annual rate of return on this investment.
14. John and Randy are competing to see who can accumulate more money. They are both given $100 to deposit into an account and see who has more after a year. John decides to deposit his whole amount into an account that pays interest at a rate of 3%, compounded continuously and withdraws it at the end of the year. Randy puts his money into an account that earns interest at 3% compounded semiannually, and after half a year, pulls ut all his moncy and puts it in another account that earns interest at 4% compounded semiannually, Who has more money at the end of the year, and by how much?
John is planning to take a loan for a major renovation project for his home. He can afford only 10% of his annual gross salary for the payment of the loan. John makes $80,000 annually. The bank offered him a loan at 8% annual interest rate for 5 years to be paid monthly. Calculate the amount of the loan he should ask for: Group of answer choices $9282 ($44, 386.59) ($36, 988.83) $49,999
Jack wins a lottery. He now wants to put a fixed amount into a savings account paying j1= 4% to cover the university cost of his child 10 years from today. The costs are estimated to be $8500 for the first year, $8500(1.03) for 2nd year, $8500(1.03)2 for the 3rd year and in the fourth year $8500(1.03)3 . How much does Jack need to deposit today to cover the above cost, starting 10 years from today?
After retiring, Rachael wants to be able to withdraw $30,000.00 every year from her account for 29 years. Her account earns 7% interest compounded annually. How much does Rachael need in her account when she retires? Rachael needs to have in her account when she retires. am I solving for future value? sorry lost. not sure if I'm trying to find future or present

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