Someone offers an investment opportunity that will pay you $725 at the end of each year for thenext 17 years. How much would you be willing to purchase that investment for if you need a 10%annual return on you money?O $3,664.49$5,815.63$143.44O $29.394.91 You would like to purchase a new car and need to finance it with an car loan. You're comfortablemaking a $300 monthly payment and your local credit union is willing to finance the vehicle for 5years at 11%. What is the maximum loan amount that you can borrow?$19,549.80$1.108.77$13,797.91$2,722.07

Maximum value is the present value of cash flow from the annuity based on the time value of money…

Someone offers an investment opportunity that will pay you $725 at the end o next 17 years. How much would you be willing to purchase that investment for annual return on you money? O $3,664.49 $5,815.63 O $143.44 O $29,394.91

Someone offers an investment opportunity that will pay you $725 at the end o next 17 years. How much would you be willing to purchase that investment for annual return on you money? O $3,664.49 $5,815.63 O $143.44 O $29,394.91

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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Acme Insurance is offering you a perpetuity that will pay you and your heirs $150,000 per year. If you have a required return of 7.5%, what is the most you would pay for this perpetuity? Question 5 options: $2,000,000 $1,000,000 $750,000 $1,750,000 $1,500,000 Previous PageNext Page
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Suppose you inherited $1,135,000 and invested it at 8.25% per year. How much could you withdraw at the beginning of each of the next 20 years? a. $117,761.21 b. $108,786.34 c. $111,148.74 d. $22,285.19 e. $93,637.50
Your retiring will be in 2036. You need to invest some money so that you can earn 10,000 per year for the next 20 years. If the rate of interest is 8% compounded annually, what is the amount of the current investment? $98,181 $90,181 $88,181 $80,181
You are scheduled to receive $40,000 in two years. When you receive it, you will invest it for 6 more years at 7 percent per year. How much will you have in 8 years? Multiple Choice $45,837.07 $63,030.67 $57,027.75 $68,727.45 $60,029.21
You want to retire in 40 years as a millionaire (i.e., to have $1,000,000). If 6% is the average rate of return on the investment during this time period, then how much should you invest per month starting at the end of this month? a. $702 b. $602 C. $802 d. $502
Suppose you inherit $100,000 at age 25 and immediately invested in a growth fund who’s annual rate of return average is 13%. Five years later, you transfer all proceeds from the scrubs fun into a long-term IRA that pays an average annual rate of 8%. Immediately you start making additional contributions of $7000 per year to the same IRA. Assuming continuous interest, steady interest rates, and a perfect record of making annualcontributions, how much is this IRA worth when you reach the age of 65? The formula that will need to be used is A = P e^r*t + D/r (e^r*t - 1). Hint: use the continuous interest formula to find the accumulated amount for the first five years, which is then the annual investment, P, into the IRA.
You would like to save a million dollars by depositing $25,000 at the end of year into an account that pays 8% interest annually. How long will it take you to achieve your savings goal? Group of answer choices 18.65 years 12.35 years 20.0 years 40.00 years 37.04 years
You are considering an investment that will pay you $5,000 per month for 10 years. You want to earn a minimum rate of return of 7.25 percent. What is the most you are willing to pay for this investment? Question 6 options: $425,891 $376,957 $428,361 $400,337 $420,354
You are opening an investment account that will earn 11.5% compounded annually. You will invest $1,000 today, $5,000 one year from today, $18000 two years from today, $8,000 three years from today, and $12,000 four years from today. What will the value of your account be 4 years from today? Question 2 options: 53,225 59,065 51,775 54,635 58,705
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You want to retire in 40 years as a millionaire (i.e., to have $1,000,000). If 6% is the average rate of return on the investment during this time period, then how much should you invest per month starting at the end of this month? a. $502 b. $702 c. $802 d. $602

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