When you retire in 15 years, you have the goal of buying a country house that estimated to cost you 1,200 million pesos at that time. In order to have the money in 15 years, during the next 5 years you plan to pay at the end of each year an amount to an investment fund that offers you an interest rate of 10% per year. At the end of those 5 years, you will invest the money resulting from that first investment in a financial instrument for the remaining time, which offers you
When you retire in 15 years, you have the goal of buying a country house that estimated to cost you 1,200 million pesos at that time. In order to have the money in 15 years, during the next 5 years you plan to pay at the end of each year an amount to an investment fund that offers you an interest rate of 10% per year. At the end of those 5 years, you will invest the money resulting from that first investment in a financial instrument for the remaining time, which offers you
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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Transcribed Image Text:When you retire in 15 years, you have
the goal of buying a country house
that estimated to cost you 1,200
million pesos at that time. In order to
have the money in 15 years, during the
next 5 years you plan to pay at the end
of each year an amount to an
investment fund that offers you an
interest rate of 10% per year. At the
end of those 5 years, you will invest
the
money resulting from that first
investment in a financial instrument for
the remaining time, which offers you
14% per year.
What will be the amount you will have
to pay each year during the first 5
years to meet your goal?
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