Ten years ago, Hailey invested $1,100 andlocked in a 8 percent annual interest ratefor 30 years (end 20 years from now).Aidan can make a 20-year investmenttoday and lock in a 9 percent interest rate.How much money should he invest now inorder to have the same amount of moneyin 20 years as Hailey? (Do not roundintermediate calculations and round yourfinal answer to 2 decimal places.) Presentvalue $

First we need to use future value formula to calculate value after 30 yearsFVn = PV*(1 + r)n FVn =…

Answered: Ten years ago, Hailey invested $1,100…

Ten years ago, Hailey invested $1,100 and locked in a 8 percent annual interest rate for 30 years (end 20 years from now). Aidan can make a 20-year investment

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

Ten years ago, Hailey invested $1,100 and
locked in a 8 percent annual interest rate
for 30 years (end 20 years from now).
Aidan can make a 20-year investment
today and lock in a 9 percent interest rate.
How much money should he invest now in
order to have the same amount of money
in 20 years as Hailey? (Do not round
intermediate calculations and round your
final answer to 2 decimal places.) Present
value $

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Ten years ago, Hailey invested $2,000 and locked in a 9 percent annual interest rate for 30 years (ending 20 years from now). Aidan can make a 20-year investment today and lock in a 10 percent interest rate.How much money should he invest now in order to have the same amount of money in 20 years as Hailey?
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