Use the savings plan formula to answer the following question.You put $400 per month in an investment plan that pays an APR of 6.5%. How much money will you haveafter 20 years? Compare this amount to the total deposits made over the time period.After 20 years the investment plan will contain $(Do not round until the final answer. Then round to the nearest cent as needed.)

The time value of money is a financial concept that refers to the idea that money today is worth…

Answered: Use the savings plan formula to answer…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer these essay questions. Be sure to show your work. Calculating Future Values 1. You have $35,000 you want to invest for the next 20 years to help with retirement. An investment plan is presented with a 9% payout over the first 10 years, followed by a 15% payout for the final 10 years. What is the total at the end of the full 20 years? Share how your calculations. Would the amount be different if it paid you 15% per year for the first 10 years and 9% per year for the next 10 years? Explain why or why not? 2. Finding the time necessary until you pay off a loan is simple if you make equal payments each month. However, when paying off credit cards many individuals only make the minimum monthly payment, which is generally 1% to 2% of the balance or $25 whichever is greater. Locate the credit card calculator at www.fincalc.com and work out this exercise: a) You currently owe $25,000 on a credit card with a 16% interest rate and a minimum payment of $25 or 1% of your balance. b) How…
At the moment you don't have any money saved for retirement, but have resolved to start making $425 monthly payments (starting one month from today) into an account expected to earn an effective annual rate of 9.9%. Given that plan, how many years will it take for you to accumulate $2.4 million? (Use excel or a financial calculator)
An example of how to calculate net present value is done using the following. Imagine you have been given an investment opportunity wherein if you invest $1,200 today, you will receive $650 dollars at the end of each year for the next 5 years. You could separately choose to invest your money at 10% interest each year. Should you take the investment opportunity? To find the answer, use the NPV formula:
You decide to set aside $120 a month for your future. Assuming a real interest rate of 7.5%, how much will you have after 25 years? How much more would you have if you invested for 30 years?
One can solve for payments (PMT), periods (N), and interest rates (1) for annuities. The easiest way to solve for these variables is with a financial calculator or a spreadsheet. Quantitative Problem 1: You plan to deposit $2,100 per year for 4 years into a money market account with an annual return of 3%. You plan to make your first deposit one year from today. a. What amount will be in your account at the end of 4 years? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. Assume that your deposits will begin today. What amount will be in your account after 4 years? Do not round intermediate calculations. Round your answer to the nearest cent. $ Quantitative Problem 2: You and your wife are making plans for retirement. You plan on living 25 years after you retire and would like to have $95,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retirement account will earn 12% annually. a.…
You started an investment account 10 years ago with $2100, and it now has grown to $8900. a. What annual rate of return have you earned (you have made no additional contributions to the account)? b. If the investment account earns 11% per year from now on, what will the account's value be ten years from now? a. The annual rate of return is%. (Round to two decimal places.) View an example Get more help - Clear all
A simple formula can help you estimate the number of years required to double your money. It's called the Rule of 72. You simply divide 72 by the interest rate (without the percent sign). For example, with an interest rate of 4%, your money will double in 72/4, or 18 years. For your initial post 1. Select one of the following questions to answer: If I invest $1000 at 3% interest, how long will take for my money to double? If I invest $1000 at 6% interest, how long will take for my money to double? If I invest $1000 at 8% interest, how long will take for my money to double? If I invest $1000 at 12% interest, how long will take for my money to double? 2. Select one of the following questions to answer: If $120 doubles in approximately 13 years, what is the interest rate? If $120 doubles in approximately 19 years, what is the interest rate? If $120 doubles in approximately 23 years, what is the interest rate? Answer the two questions in the instructions. You must include calculations…
Give typed solution only If you put $200,000 into your investment account now for 10 year at 5% annual interest, what is the difference in interest income between simple interest calculation and compound interest calculation?
Consider two investments: Invest $1,000 and receive $110 at the end of each month for the next 10 months Invest $1,200 and receive $130 at the end of each month for the next 10 months If this were your money, and you want to earn at least 12% interest on your money, which investment would you make, if any? Solve the problem by annual cash flow analysis.
You are planning to put $1,060 in the bank at the end of each year for the next three years in hopes that you will have enough money for a newest LCD model that is available. If you are investing at an annual interest rate of 12%, you'll have accumulated at the end of three years. How would you plug this into a BA II calculator?
Suppose you invest $200 a month for 6 years into an account earning 9% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 20 years. How much will you have in the end? $ Suppose instead you didn't invest anything for the first 6 years, then deposited $200 a month for 20 years into an account earning 9% compounded monthly. How much will you have in the end?
In planning for your retirement, you would like to withdraw $50,000 per year for 17 years. The first withdrawal will occur 20 years from today. Click here to access the TVM Factor Table Calculator Part a Your answer is incorrect. What amount must you invest today if your return is 10% per year? $ Round entry to the nearest dollar. Tolerance is 14. II

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