We want to have $100,000 in 10 years for a Wedding. If we can make an investment paying 6% compounded quarterly, what single deposit made now will produce this future value? What is the name of the Table that we would use? 11. For the above problem: What Row would we be in? 12. For the above problem What Column would we be in? 13. What is the “factor” for this problem? 14. What is the answer to this problem?
We want to have $100,000 in 10 years for a Wedding. If we can make an investment paying 6% compounded quarterly, what single deposit made now will produce this future value? What is the name of the Table that we would use? 11. For the above problem: What Row would we be in? 12. For the above problem What Column would we be in? 13. What is the “factor” for this problem? 14. What is the answer to this problem?
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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Q10. We want to have $100,000 in 10 years for a Wedding. If we can make an investment paying 6%
compounded quarterly, what single deposit made now will produce this future value ? What is the name
of the Table that we would use?
11. For the above problem: What Row would we be in?
12. For the above problem What Column would we be in?
13. What is the “factor” for this problem?
14. What is the answer to this problem?
V
Expert Solution
Step 1: Steps to calculate the present value:
Firstly calculate the periodic interest rate and total number of periods required to find in the present value of the single amount factor table.
The row would be 40 because the row represents the n number of periods.
The column would be 1.50% interest rate because the column represents the periodic interest rate r.
The factor would be the value at the intersecting point of row and column of r and n that shows the $0.551262321937385 per $1.
The answer to this problem will be shown in further steps.
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