Suppose that a certain car has the following average operating and ownership costs. Average Costs per Mile Operating $0.24 a. If you drive 20,000 miles per year, what is total annual expense for this car? Ownership $0.68 Total $0.92 b. If the total annual expense for this car is deposited at the end of each year into an IRA paying 8.5% compounded yearly, how much will be saved at the end of nine nt -1 years? Use the formula A= a. If you drive 20,000 miles per year, the total annual expense for this car is $ (Round to the nearest dollar as needed.)

Suppose that a certain car has the following average operating and ownership costs. Average Costs per Mile Operating $0.24 a. If you drive 20,000 miles per year, what is total annual expense for this car? Ownership $0.68 Total $0.92 b. If the total annual expense for this car is deposited at the end of each year into an IRA paying 8.5% compounded yearly, how much will be saved at the end of nine nt -1 years? Use the formula A= a. If you drive 20,000 miles per year, the total annual expense for this car is $ (Round to the nearest dollar as needed.)

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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Similar questions

A company wants to have $30,000 at the beginning of each 6-month period for the next 4 1/2 years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.42%, compounded semiannually? (b) Solve the problem. (Round your answer to the nearest cent.)$ _____
If the owner earns 5% interest on her investments, determine the equivalent annual cost of owning a car with the following costs (EOY = end of year). Initial down payment = $2200 Annual payments = $5500, EOY1–EOY4 Prepaid insurance = $1500, growing 8% annually Gas & oil & minor maintenance = $2000, growing 10% annually Replacement tires = $650 at EOY4 & $800 at EOY8 Major maintenance = $2400 at EOY5 Salvage value = $3750 at EOY9.
Assume you won the state lottery and you are entitled to $5,000,000. If you choose not to take the money right away but wish to be paid weekly, you estimate that you will want to receive this cash flow over the next 10 years. How much will your weekly payment be at an interest rate of 5% ?
You just purchased a parcel of land for $40,000. To earn a 9% annual rate of return on your investment, how much must you sell the land for in 3 years? Assume annual compounding. (Round to nearest penny, e.g. 1234.56)
Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.84% interest. Suppose also that you can put down 30%. What are the monthly payments? (Round your answer to the nearest cent.) $ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.) $ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.)
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Suppose you purchase an automobile for a selling price of $1,600,000. You make a down payment of 5% of the selling price and finance the remaining balance for 4 years at an annual interest rate of 5%. The sales tax is 7.5% of the selling price, and the license fee is 0.8% of the selling price. Find the monthly payment.
How much do you need to save each year for 30 years in order to have $775,000, assuming you are investing the money in an account that earns 8%? How much of the $775,000 comes from contributions (your out of pocket costs)?
You’re considering purchasing an apartment for $200,000. You believe that you can earn an initial rental income of $12,000 per year on it and that the rental income will grow at 3% per year. You also believe that you can sell the apartment for $225,000 after 5 years. The IRR calculation is shown below:
You purchase a plot of land worth $54,000 to create a community garden. To do so, you secure a 10-year loan, charging 5.22% APR, compounded monthly, and requiring monthly payments of $505. (Assume the value of the land is still $54,000. Round each answer to the nearest dollar.) (a) Assuming that you put some money down, what was your original loan amount (in dollars)? X $ (b) What is the outstanding balance (in dollars) on your loan after making 4 years of payments? $ 170255.84 (c) How much equity (in dollars) do you have in the garden after 4 years? $ X
A man buys a house paying $8,000 down and $1,000 at the end of each 6 months for a period of 10 years. Find the equivalent cash price of the house, assuming an interest rate 5% compounded semi-annually.
Suppose you have estimated that you will need $2,500 per month in your retirement to meet your expenses and live comfortably, and that you have found or chosen a fund (account) which pays monthly interest 4% APR . What principal, or balance, will your account need to maintain in order to be able to pay you this amount each month? Round/take your answer to the nearest cent.

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