When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a fixed interest rate of 15 percent. On your 18th birthday, your parents decide to withdraw the money that they deposited to pay for your college tuition. How much money can they expect to withdraw?
When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a fixed interest rate of 15 percent. On your 18th birthday, your parents decide to withdraw the money that they deposited to pay for your college tuition. How much money can they expect to withdraw?
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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- When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a fixed interest rate of 15 percent. On your 18th birthday, your parents decide to withdraw the money that they deposited to pay for your college tuition. How much money can they expect to withdraw?
- What is the
present value of your end-of-year investment of $1,000 per year, with the first cash flow received three years from today and the last one 10 years from today? Use a discount rate of 12 percent
- Consider the stock of BIC Company has an annual dividend of $ 3 in 2020. The dividend is expected to grow at a constant rate of 7 percent permanently in 2023. The market requires a 14 percent return on the company. What is the current price of a share of the stock?
- You have just found the perfect home. However, in order to buy it, you will need to take out a TRL 450,000, 10-year mortgage at an annual rate of 15,50 percent. What will your monthly mortgage payments be?
- ABC Trucking has issued an 14-percent, 10-year bond that pays interest semiannually. If the market prices the bond to yield an effective annual rate of 13 percent. What is the price of the bond?
- You invest $ 20.000 in a bank account to buy a house at annual interest rate 15 per year, compounded monthly, for 5 years. What is the price of house in this respect?
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