The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How much is needed to invest monthly for a year at 12% nominal interest rate, compounded quarteriy, so that each emplayee will receive a $1,200 bonus? A $3,945 B $3,844 s2,075 D $4,734

The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How much is needed to invest monthly for a year at 12% nominal interest rate, compounded quarteriy, so that each emplayee will receive a $1,200 bonus? A $3,945 B $3,844 s2,075 D $4,734

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

The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How much is needed to invest
monthly for a year at 12% nominal interest rate, compounded quarteriy, so that each employee will receive a $1,200 bonus?
A
$3,945
В
$3,844
$2,075
D) $4,734

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You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $79,000 per year for the next two years, or you can have $68,000 per year for the next two years, along with a $24,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 9 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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