Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person toreach the goal. Assume the compounding and payment periods are the same.The person deposits $200 per month into an account with an APR of 8%.Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice.(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)OA. Yes, because the amount that will be in the college fund, SOB. No, because the amount that will be in the college fund, Sis more than the goal of $40,000.is less than the goal of $40,000.

Given, The required amount is $40000. Term is 15 years

Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $200 per month into an account with an APR of 8%.

Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $200 per month into an account with an APR of 8%.

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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How much will I have saved after 6 years by contributing $1,200 at the end of each year if you expect to earn 11% on the investment?
Investment A requires you to pay $30,000 at t = 0 and you will receive $49,000 after five years. Investment B costs $73,000 and provides a cash flow of $128,000 after seven years. What is the rate of return for each of the two investments?
K Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $55 per month into an account with an APR of 7%. ... Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) O A. No, because the amount that will be in the college fund, $ is less than the goal of $65,000. OB. Yes, because the amount that will be in the college fund, $ is more than the goal of $65,000. 3
You have finished your time at Kelley and need to start thinking about retirement. You plan on working for 30 moreyears and then retire. Upon your retirement 30 years from today, you plan to have enough money to withdraw $75,000every 6 months, with the first payment coming exactly six months after your retirement day. You expect yourretirement account to earn a return of 8% APR (stated rate), compounded quarterly, on all funds in the retirementaccount. Assume you want to draw on the retirement fund for 20 years after your retirement (40 semiannualwithdrawals), and you want to fund the account with annual level payments, with the first payment being made oneyear from today and the last payment occurring the day of your retirement (30 total payments into the retirementaccount). a) How much do you need in the account on your retirement day to fund the expected semiannual withdrawals?b) How much does each annual payment need to be for the next 30 years to fund the retirement account?
suppose you are offered the following three accounts to invest $10,000 for 20 years: 18% simple interst and 5% interest compounded monthly. which is the besr choice?
An investment will generate $12,000 a year for 30 years. If you can earn 12 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it?-Select-YesNoItem 2 Calculate the present value of investment, if you could earn only 9 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it in this case?
A saver plans to make 25 deposits of 100 at the end of each year. If the interest rate were 6% effective per annum, he would accumulate a fund of amount F on the date of the last payment. The saver makes the first 10 deposits of 100. However, the account only credits an effective annual interest rate of 5%. Therefore, the saver determines that he must increase each of the remaining 15 deposits to X so that he can accumulate the desired fund of F. Assuming that the fund continues to earn 5% effective annual interest, find X.
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You decide to invest in an instrument that pays 5% annual capitalizable interest each semester. If you want to get an amount of $1,000,000 at the end of 20 years, giving contributions at the end of each month, how much does each monthly contribution have to be to reach the goal?
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