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

Transcribed Image Text:Draw a timeline in your notes to practice, then use the one below to help you! Tom started his career with Oracle with an
intention to retire in 25 years. When he retired, he started receiving $66 000 every 6 months for 15 years, starting on the date of
his retirement. How much did Tom deposit in an account at the start of his career, if interest is 9.25% compounded semi-
annually?
Retirement
Start of career (semi-annual periods)
25 yrs
40 years
80 semi-annual periods
today
2
49
50
51
79
IY = ?
$66,000 $6,000
............ $6,000
CY = ?
PV, =?+
FV,
n, =?
PV,
FV, -0
Select one:
a. $1,449,334
b. $79,360
C. 5115.594
d. $1,108,432
e. S147.332
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