Sam Long anticipates he will need approximately $226,800 in 15 years to cover his 3-year-old daughter's college bills for a 4-year degree. How much would he have to invest today at an interest rate of 8% compounded semiannually? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount
Sam Long anticipates he will need approximately $226,800 in 15 years to cover his 3-year-old daughter's college bills for a 4-year degree. How much would he have to invest today at an interest rate of 8% compounded semiannually? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount
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
Related questions
Question
Transcribed Image Text:Sam Long anticipates he will need approximately $226,800 in 15 years to cover his 3-year-old daughter's college bills for a 4-year
degree.
How much would he have to invest today at an interest rate of 8% compounded semiannually? (Use the Table provided.) (Do not
round intermediate calculations. Round your answer to the nearest cent.)
Amount
Transcribed Image Text:Present value interest factor of $1 per period at i% for n periods, PVIF(i,n).
Period
0.5%
1.0%
1.5%
0.9852
2.0%
3.5%
0.9662
0.9335
0.9019
0.8714
0.8420
2.5%
3.0%
4.0%
0.9615
0.9246
0.8890
0.8548
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
0.9950
10.0%
0.9901
0.9803
0.9804
0.9756
0.9709
0.9569
0.9524
0.9479
0.9434
0.9390
0.9346
0.9302
0.9259
0.9901
0.9707
0.9612
0.9518
0.9426
0.9217
0.9174
0.9132
0.9091
0.9157
0.9070
0.8985
0.8900
0.8817
0.8734
0.8653
0.8573
0.8495
0.8417
0.8340
0.8264
0.9851
0.9802
0.9706
0.9610
0.9563
0.9423
0.9238
0.9057
0.9286
0.9060
0.9151
0.8763
0.8638
0.8516
0.8396
0.8278
0.8163
0.8050
0.7938
0.7829
0.7722
0.7617
0.7513
0.9422
0.8885
0.8626
0.8386
0.8227
0.8072
0.7921
0.7773
0.7629
0.7488
0.7350
0.7216
0.7084
0.6956
0.6830
0.9754
0.9705
0.9657
0.9609
0.9561
0.9513
0.9515
0.9420
0.9283
0.8839
0.8219
0.8025
0.7835
0.7651
0.7473
0.7299
0.7130
0.6966
0.6806
0.6650
0.6499
0.6352
0.6209
9.
0.9145
0.8880
0.8623
0.8375
0.7903
0.7599
0.7307
0.7026
0.8135
0.7679
0.7462
0.7252
0.7050
0.6853
0.6663
0.6480
0.6302
0.6129
0.5963
0.5801
0.5645
0.9327
0.9235
0.9143
0.9010
0.8706
0.8413
0.8131
0.7860
0.7348
0.7107
0.6874
0.6651
0.6435
0.6227
0.6028
0.5835
0.5649
0.5470
0.5298
0.5132
8.
9.
0.8877
0.8535
0.8207
0.7894
0.7594
0.7337
0.7089
0.7032
0.6768
0.6516
0.6274
0.6042
0.5820
0.5607
0.5403
0.5207
0.5019
0.4838
0.4665
0.7664
0.7441
0.8746
0.8368
0.8007
0.6729
0.6446
0.6176
0.5919
0.5674
0.5439
0.5216
0.5002
0.4799
0.4423
0.4604
0.4418
0.4241
10
0.9053
0.8963
0.8617
0.8203
0.7812
0.6756
0.6496
0.6246
0.6439
0.6139
0.5854
0.5584
0.5327
0.5083
0.4852
0.4632
0.4224
0.4035
0.3855
11
0.9466
0.8489
0.8043
0.7621
0.7224
0.6849
0.6162
0.5847
0.5549
0.5268
0.5002
0.4751
0.4513
0.4289
0.4076
0.3875
0.3685
0.3505
0.9419
0.9372
0.9326
12
0.8874
0.8364
0.8240
0.7885
0.7436
0.6618
0.6394
0.7014
0.5897
0.5568
0.5260
0.4970
0.4697
0.4440
0.4199
0.3971
0.3757
0.3555
0.3365
0.3186
13
0.8787
0.7730
0.7254
0.6810
0.6006
0.5643
0.5303
0.4986
0.4688
0.4410
0.4150
0.3906
0.3677
0.3463
0.3262
0.2897
0.2633
0.3073
14
15
16
17
0.7077
0.6905
0.8700
0.8118
0.7579
0.6611
0.6178
0.5775
0.5400
0.5051
0.4726
0.4423
0.4141
0.3878
0.3633
0.3405
0.3191
0.2992
0.2807
0.9279
0.8613
0.7999
0.7430
0.6419
0.5969
0.5767
0.5572
0.5553
0.5167
0.3888
0.3651
0.3624
0.3380
0.3144
0.4810
0.4479
0.4173
0.3152
0.2941
0.2745
0.2563
0.2394
0.9233
0.9187
0.9141
0.9096
0.9051
0.8528
0.7880
0.7284
0.6736
0.6232
0.5339
0.4945
0.4581
0.4246
0.3936
0.3387
0.2919
0.2711
0.2519
0.2341
0.2176
0.8444
0.7764
0.7142
0.6572
0.6050
0.5134
0.4732
0.4363
0.4024
0.3714
0.3428
0.3166
0.2925
0.2703
0.2499
0.2311
0.2138
0.1978
18
0.8360
0.7649
0.7002
0.6412
0.5874
0.5384
0.4936
0.4528
0.4155
0.3815
0.3503
0.3219
0.2959
0.2720
0.2502
0.2303
0.2120
0.1952
0.1799
19
0.8277
0.7536
0.6864
0.6255
0.5703
0.5202
0.4746
0.4333
0.3957
0.3616
0.3305
0.3022
0.2765
0.2531
0.2317
0.2122
0.1945
0.1783
0.1635
20
0.8195
0.7425
0.6730
0.6103
0.5537
0.5026
0.4564
0.4146
0.3769
0.3427
0.3118
0.2838
0.2584
0.2354
0.2145
0.1956
0.1784
0.1628
0.1486
0.2190
0.2037
0.7315
0.6598
0.5375
0.2665
0.2502
0.1987
0.1803
21
22
0.9006
0.8114
0.5954
0.4856
0.4388
0.3968
0.3589
0.3249
0.2942
0.2415
0.1637
0.1487
0.1351
0.2257
0.1662
0.1228
0.1117
0.1015
0.8961
0.8034
0.7207
0.6468
0.5809
0.5219
0.4692
0.4220
0.3797
0.3418
0.3079
0.2775
0.1839
0.1502
0.1358
0.8916
0.7954
0.7100
0.6342
0.5667
0.5067
0.4533
0.4057
0.3634
0.3256
0.2919
0.2618
0.2349
0.2109
0.1895
0.1703
0.1531
0.1378
0.1240
23
24
25
0.4919
0.3477
0.2767
0.2470
0.1763
0.1577
0.1412
0.1264
0.1133
0.2206
0.2071
0.8872
0.7876
0.6995
0.6217
0.5529
0.4380
0.3901
0.3101
0.1971
0.2622
0.2330
0.1842
0.1640
0.1460
0.1301
0.1160
0.1034
0.0923
0.8828
0.8784
0.7798
0.6892
0.6095
0.5394
0.4776
0.4231
0.3751
0.3327
0.2953
0.1199
0.1064
0.0945
0.0839
0.1945
0.1826
0.3184
0.1722
0.1525
0.1352
0.2812
0.2678
26
0.7720
0.6790
0.5976
0.5262
0.4637
0.4088
0.3607
0.2486
0.2198
0.3047
0.2356
0.2074
0.1609
0.1419
0.1252
0.1105
0.0976
0.0863
0.0763
0.5859
0.5744
0.4502
0.3950
0.3468
27
28
29
0.8740
0.7644
0.6690
0.5134
0.2233
0.1159
0.1019
0.0895
0.0788
0.0693
0.2551
0.2429
0.2314
0.4371
0.3817
0.3335
0.2916
0.1956
0.1715
0.1504
0.1320
0.8697
0.8653
0.8610
0.7568
0.6591
0.5009
0.7493
0.6494
0.5631
0.4887
0.4243
0.3687
0.3207
0.2790
0.2117
0.1846
0.1610
0.1406
0.1228
0.1073
0.0939
0.0822
0.0719
0.0630
0.0865
0.0754
0.0657
0.0573
0.1142
0.1063
0.3563
0.3083
0.2670
0.2006
0.1741
0.1512
0.1314
0.0994
0.5521
0.5412
0.6398
0.4767
0.4120
30
31
0.7419
0.7346
0.0797
0.0691
0.0600
0.0521
0.2204
0.2099
0.8567
0.6303
0.4651
0.4000
0.3442
0.2965
0.2555
0.1902
0.1643
0.1420
0.1228
0.0920
0.1147
0.0852
0.0735
0.0634
0.0548
0.0474
0.2445
0.2340
32
0.8525
0.7273
0.6210
0.5306
0.4538
0.3883
0.3326
0.2851
0.1803
0.1550
0.1333
0.0988
0.0677
0.0582
0.0500
0.0431
0.1072
0.1002
0.0937
0.0875
0.0818
0.1252
0.0789
0.0919
0.0855
0.1999
0.1709
0.1462
0.1379
0.6118
0.5202
0.4427
0.3770
0.3213
0.2741
0.8482
0.8440
0.8398
33
0.7201
0.0457
0.0417
0.0381
0.0348
0.0391
0.0624
0.0575
0.3105
0.2636
0.2239
0.1904
0.1620
0.1175
0.0730
0.0534
0.4319
0.4214
34
0.7130
0.6028
0.5100
0.3660
0.7059
0.3554
0.3000
0.2534
0.2143
0.1813
0.1535
0.1301
0.1103
0.0796
0.0676
0.0490
0.0356
35
0.5939
0.5000
0.0530
0.0449
0.0323
0.1727
0.1644
0.1566
0.0626
0.0580
0.1227
0.1036
0.0740
0.2437
0.2343
0.2898
0.2050
0.1455
0.3450
0.3350
0.3252
0.3158
0.3066
0.2976
0.2890
0.6989
0.5851
0.4902
0.4111
36
37
0.8356
0.0294
0.0267
0.0489
0.0412
0.1158
0.1092
0.1031
0.0688
0.0640
0.2800
0.1962
0.1379
0.0973
0.4011
0.3913
0.8315
0.6920
0.5764
0.4806
0.0537
0.0450
0.0378
0.0318
0.1307
0.1239
0.1175
0.1113
0.1055
0.1000
0.0948
0.0899
0.0852
0.0807
0.0765
0.0725
0.0914
0.0858
0.0765
0.2253
0.2166
0.1878
0.2706
0.2614
0.8274
0.8232
0.8191
0.8151
0.8110
0.4712
0.6852
0.6784
0.6717
0.6650
38
0.5679
0.0347
0.0318
0.0243
0.0221
0.0415
0.0383
0.0353
0.0325
0.0290
0.0497
0.0460
0.0426
0.0395
0.1797
0.1491
0.0715
0.0596
0.5595
0.5513
39
0.4619
0.3817
0.0265
0.0554
0.0516
0.0480
0.0972
0.0917
0.0865
0.0816
0.0770
0.0727
0.0685
0.0647
0.0805
0.0756
0.0710
0.0667
0.0668
0.0624
0.0583
0.0545
0.0509
0.0476
0.0445
0.2083
0.2003
0.1926
0.1420
0.1353
0.1288
0.1719
0.2526
0.2440
0.2358
40
0.4529
0.3724
0.0292
0.0242
0.0201
0.3633
0.1645
0.5431
0.5351
0.5272
41
0.4440
0.0183
0.0268
0.0246
0.0221
0.1574
0.1507
0.1442
0.1380
0.1320
0.1263
0.1209
0.1157
0.1107
0.3545
0.6584
0.6519
0.6454
0.6391
0.4353
0.4268
42
43
44
45
46
0.0446
0.0365
0.0300
0.0202
0.0166
0.2278
0.2201
0.2127
0.2055
0.1985
0.1918
0.1853
0.1791
0.1852
0.1780
0.1712
0.1646
0.1583
0.1522
0.1463
0.1407
0.1227
0.1169
0.1113
0.1060
0.1009
0.0961
0.0916
0.0872
0.2805
0.2724
0.2644
0.8070
0.3458
0.0184
0.0151
0.0276
0.0254
0.0235
0.0415
0.0338
0.0226
0.0626
0.0588
0.3374
0.3292
0.3211
0.3133
0.5194
0.8030
0.7990
0.7950
0.7910
0.4184
0.0207
0.0190
0.0313
0.0168
0.0137
0.4102
0.4022
0.3943
0.3865
0.0386
0.0359
0.0334
0.5117
0.0154
0.0125
0.0290
0.0269
0.0552
0.0518
0.0487
0.0457
0.2567
0.6327
0.6265
0.6203
0.5042
0.0140
0.0113
0.0216
0.0199
0.0174
0.2493
0.2420
0.2350
0.2281
0.0416
0.0389
0.0363
0.0339
0.0103
0.0128
0.0117
0.4967
0.0160
0.0249
0.0230
47
0.4894
0.4821
0.3057
0.2982
0.2909
0.0610
0.0575
0.0543
0.0311
0.0289
0.7871
0.0147
0.0094
0.0184
0.0169
48
0.3790
0.3715
49
0.7832
0.6141
0.0269
0.0213
0.0134
0.0107
0.0085
0.0688
0.0429
50
0.7793
0.6080
0.4750
2345
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