What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.)$ Twins graduate from college together and start their careers. Twin 1 invests $2500 at the end of each year for 10 years only (until age 30) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.)$

Two questions appear on the board. They are unrelated and are not sub parts. Hence, only the first…

What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.) $

What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.) $

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.18E

See similar textbooks

Related questions

Q: Caleb Clark Ventures invests $2 million in convertible preferred stock in a company with an $8…

A: The preferred stock is a hybrid of equity and debt instrument that provides the holder with…

Q: The future value of $900 saved each year for 10 years at 8 percent. (Round your discount factor to 3…

A: C = Annual cash flow i.e. $900 r = Interest rate i.e. 0.08 or 8% n = Period i.e. 10 years FV =…

Q: The Jackson Company have R200,000 to invest. Their target portfolio return is 9.35% and they have…

A: We have to design a portfolio that achieves its target return. We have to design the allocation in…

Q: James is an executive with ABC Digital. He is looking at the company sales for that past six…

A: Different types of analytical frameworks are used to make decisions about the future. Some describe…

Q: A company's 5-year bonds are yielding 9% per year. Treasury bonds with the same maturity are…

A: The nominal yield on a bond: The nominal yield on a bond is the quoted yield on a bond. It can be…

Q: The following represents the stockholder's equity account of Security Data Company: R Preferred…

A: A stock dividend will keep the total value of the shareholders' equity at the same level but there…

Q: Ingrid wants to buy a $22,000 car in 6 years. How much money must she deposit at the end of each…

A: Future Value = $22,000 Time Period = 6 Years Interest Rate = 5.8%

Q: Mala Prohibita Inc. is evaluating a proposal to acquire a new equipment. The equipment would equire…

A: Cost of capital(k) will be the yield to maturity(YTM) after tax. Yield to maturity(YTM) is the rate…

Q: You are the owner of 100 bonds issued by Euler, Ltd. These bonds have 8 years remaining to maturity,…

A: In this question we are given number of bonds=100 number of years to maturity =8 years coupon…

Q: A licensed real estate salesperson wants to change brokers. Which of the following actions is…

A: If a licensed real estate salesperson wants to change brokers, he should notify the current broker…

Q: let's consider a capital investment analysis of purchasing a patent for $6,000,000 with a 10-year…

A: NPV is the net present value. It is a very important capital budgeting tool. NPV is computed by…

Q: The operations manager of a current transport company to change the most modern system on the…

A: Equivalent annual cost The cost incurred in the process of purchasing, operating, and maintaining an…

Q: What are the similarities between the income, market, and asset approaches to business valuation?

A: Business valuation is the measure of the economic value of a company for the benefit of the owners.…

Q: What does Working Capital Mean?

A: Working capital is the difference between the current asset and current liability of the firm, which…

Q: Mala Prohibita Inc. is evaluating a proposal to acquire a new equipment. The equipment would quire…

A: NPV It is a capital budgeting tool to decide on whether the capital project should be accepted by…

Q: d afternoon, Could you please explain why the future value factor is 100. I understand why the…

A: Future value of the deposit includes the amount being deposited and amount of interest being…

Q: Which of the followings is NOT an advantage of financial institutions in consumption smoothing? A.…

A: Financial Institutions Institutions involved in financial transactions such as lending and borrowing…

Q: A 12-cylinder heavy-duty diesel engine will have a guaranteed residual value of $1,000 in five…

A: Given: Particulars Amount Amount $1,000 Years 5 Interest rate 9%

Q: Consider the following data: Monthly Profit of a Gym Month Jan-12 Feb-12 Mar-12 Apr-12 May-12…

A: Moving average A stock indicator used in technical analysis that helps in calculating the moving…

Q: Use the following information to answer this question. Windswept, Inc. 2017 Income Statement ($…

A: Equity multiplier is a ratio calculated to use see the company used it for how much assets are used…

Q: At a payday lending company, a loan of $500 will accrue interest as follows: Loan Duration Interest…

A: We have to calculate the annual simple interest rate in the first case, when principal and the…

Q: 7. If a Neoclassical economist is asked about returns to scale in, he/she would answer that in the…

A: Neoclassical theory: According to the Neoclassical Growth theory, the three components of labor,…

Q: Income Statement for the year ended December 31, 2021 Net sales $65,117 Gain on disposal of fixed…

A: A statement of cash flows is prepared to know the cash inflows and cash outflows of the company…

Q: A couple received a $131,000 inheritance the year they turned 50 and invested it in a fund that…

A: Information Provided: Inheritance amount = $131,000 Interest rate = 6.4% compounded semi-annually…

Q: Dexter, Incorporated, had a cost of goods sold of $43,921. At the end of the year, the accounts…

A: Given, The cost of goods sold is $43,921 Accounts payable balance $7,943

Q: Chooanne D' Sexy invested in a four-year project and expect a rate of return of 10%. Information…

A: NPV that is net present value is the difference between the present value of cash flow and initial…

Q: Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose…

A: The monthly payment of a loan includes both the interest portion and principal portion. The interest…

Q: Share Valuation A. Giant Growth Co. is growing fast. Dividends are expected to grow at a 20% growth…

A: Here, To Find: Part A. Intrinsic value of stock =? Part B. Decision to buy at the current market…

Q: The future value is $ (Round to the nearest cent.)

A: Information Provided: Year of payments = 10 Payments = $33,000 Interest rate = 4%

Q: Julia Rivera lives with her two sons, ages 6 and 9. They have had difficulty managing their…

A: Financial planning is very important especially today when there can be a lot of uncertain…

Q: None

A: *Answer: Using the tax rate schedule, tax is caluclated as below

Q: A student starting ollege is considering two alternative car rental ptions. Under option 1, w will…

A: The concept of time value of money will be applied here. Time value of money is an important concept…

Q: The amount a person would have to deposit today (present value) at a 5 percent interest rate to have…

A: Future Value = $1,000 Time Period = 5 Years Interest Rate = 5%

Q: McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of…

A: McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of…

Q: A recent IBM research of 585 mobile application developers and managers revealed that just one-third…

A: Now a days there is an excessive rise in the mobile app development sector. Everyone is coming up…

Q: Mala Inse Co. is evaluating the purchase of a P500,000 machine. The cash inflow from the investment…

A: The internal rate of return is rate of return at which present value of cash flow is equal to the…

Q: Countries within the Caribbean continue to grapple with debt issues. Many have resorted to seeking…

A: The Caribbean is a part of the Americas that includes the nearby countries in Caribbean Sea, its…

Q: ase explain the certainty equivalent of a risky

A: Project involve risk and depending on the risk of the project there is return on the project. But…

Q: Mala Prohibita Inc. is evaluating a proposal to acquire a new equipment. The equipment would require…

A: The cost of capital is the return that the company pays out to its investors. NPV measures the…

Q: Commercial Spreads O The margin over US Treasuries used to determine the rate O The difference…

A: Commercial spread is an important indicator in commercial mortgage economy in a country and is…

A: Arbitrage trading is an investment strategy in financial markets where a trader buys and sells an…

Q: Question 3 B a) Determine the growth rate. a) Determine the required rate of return. b) Compute the…

Q: What is money invested i

A: According to the TVM concept, money is worth deteriorating over time. it's worth deteriorating by…

Q: A woman, with her employer's matching program, contribute $700 at the end of each month to her…

A: Monthly withdrawal refers to the amount that is withdrawn from the bank on the respective date of…

Q: If the profit function for a firm is given by P(x) = -2600 + 150x-x² and limitations on space…

A: Break even point In production, the break even point is the quantity that causes profit/loss to be…

Q: 3.1 REQUIRED Calculate the following for both projects from the information provided below: 3.1.1…

A: Payback period The time that a project undertakes to recover the funds invested in a project is…

Q: The following certificate of deposit (CD) was released from a particular bank. Find the compound…

A: Future value of amount being accumulated over the period of time and amount of investment done…

Q: Are you agree with the phrase (sentence): "In the following case, person who prefer project B to…

A: ENPV of Project A is 100 ENPV of project B is 120 Standard deviation of Project A is 15 Standard…

Q: Gbenda Corporation has sales of $91,200, net income of $18,240, dividends paid of $3,830, total…

Q: Determine the buying price of the bond.

A: Information Provided: Par value = 2,000,000 Effective interest rate = 10% Semi-Annual Coupon…

Question

What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.)
$

Twins graduate from college together and start their careers. Twin 1 invests $2500 at the end of each year for 10 years only (until age 30) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin
2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.)
$

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Money Management and Achieving Financial Goals

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What lump sum do parents need to deposit in an account earning 11%, compounded monthly, so that it will grow to $100,000 for their son's college fund in 12 years? (Round your answer to the nearest cent.)
1) Suppose that you want to create a "college fund" for your newborn child and place $300 in a bank account at the end of each of the next 20 years. If that account earns an annual rate of return of 7%, how much will be in that account at the end of the twentieth year? A) $13,420.00 B) $12,977.53 C) $13,178.20 D) $11,828.32 E) $12,298.65
Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 5%. How much should you deposit monthly to accumulate $85,000 in 15 years?
A family wants to have a $130,000 college fund for their children at the end of 17 years. What contribution must be made at the end of each quarter if their investment pays 7.3%, compounded quarterly? (a) State whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity annuity due (b) Solve the problem. (Round your answer to the nearest cent.) $ 7
A couple wants to set up a college savings account for their grandchild. If the account earns 4.4% interest compounded quarterly, how much should they invest today so that the account will be worth $50,000 in 18 years? Round your final answer to two decimal places.
A man wants to set up a 529 college savings account for his granddaughter. How much would he need to deposit each year into the account in order to have $80,000 saved up for when she goes to college in 15 years, assuming the account earns a 8% annual return. Annual deposit:
To pay for your child’s education, you wish to have accumulated $25,000 at the end of 15 years. To do this, you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay 6 percent compounded annually, how much must you deposit each year to reach your goal?
← A newborn child receives a $8,000 gift toward a college education from her grandparents. How much will the $8,000 be worth in 19 years if it is invested at 5.9% compounded quarterly? It will be worth $ (Round to the nearest cent.)
New parents wish to save for their newborn's education and wish to have $46,000 at the end of 17 years. How much should the parents place at the end of each year into a savings account that earns an annual rate of 5.6% compounded annually? (Round your answers to two decimal places.)$ How much interest would they earn over the life of the account?$ Determine the value of the fund after 10 years.$ How much interest was earned during the 10th year?$
A couple plans to save for their child's college education. What principal must be deposited by the parents when their child is born to have $42,000 when the child reaches the age of 18? Assume the money earns 8% interest compounded quarterly. Round your answer to two decimal places.)
A newborn child receives a $7,000 gift toward a college education from her grandparents. How much will the $7,000 be worth in 18 years if it is invested at 5% compounded quarterly? It will be worth $. (Round to the nearest cent.)
Assume the total cost of a college education will be $525,000 when your infant child enters college in 17 years. Your are fortunate in that your uncle has just given your child a $25,000 gift to start the college fund. How much do you have to invest at the end of each month in order to accumulate the required $525,000 at the end of 17 years if your monthly investments earn an annual interest rate of 3.5 percent, compounded monthly?