You are considering the following 3 investments, each with an upfront cost of $45,000 today. Which would you choose?Show your work to support your answer.a) $5,000 at the end of each year for 15 years with the first payment one year from today (end of year 1). APR of6% with semi-annual compoundingb) $5,200 for 16 years with the first payment 2 years from today. APR of 7% with annual compoundingc) $4,400 at the end of each for 17 years with the first payment one year from today (end of year 1). APR of 5%with monthly compounding

The present value of the future money to be received in the future based on the interest rate and…

You are considering the following 3 investments, each with an upfront cost of $45,000 today. Which would y how your work to support your answer. a) $5,000 at the end of each year for 15 years with the first payment one year from today (end of year 1 6% with semi-annual compounding b) $5,200 for 16 years with the first payment 2 years from today. APR of 7% with annual compounding c) $4,400 at the end of each for 17 years with the first payment one year from today (end of year 1). AP with monthly compounding

You are considering the following 3 investments, each with an upfront cost of $45,000 today. Which would y how your work to support your answer. a) $5,000 at the end of each year for 15 years with the first payment one year from today (end of year 1 6% with semi-annual compounding b) $5,200 for 16 years with the first payment 2 years from today. APR of 7% with annual compounding c) $4,400 at the end of each for 17 years with the first payment one year from today (end of year 1). AP with monthly compounding

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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Similar questions

You are looking at two investment options, A and B. Investment A is a 15-year annuity that needs an end-of-month payment of $1,100 and has an APR of 9% compounded monthly. Investment B is also a 15-year investment, but a lump sum investment that has as an APR of 8% compounded daily. How much money do you need to invest in B today as a single lump sum amount if you wish to have the same wealth as in Investment A in 15 years? If Investment B, with 8% APR compounded daily, gave you the option of investing a constant amount at the end of every six months, what would this amount be in order to give you the same wealth as in A at the end of 15 years?
You have your choice of two investment accounts. Investment A is a 7-year annuity that features end-of-month $2,900 payments and has an APR of 6 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 6 percent, also good for 7 years. How much money would you need to invest in B today for it to be worth as much as Investment A 7 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
Give only typing answer with explanation and conclusion
suppose you are offered the following three accounts to invest $10,000 for 20 years: 18% simple interst and 5% interest compounded monthly. which is the besr choice?
You just purchased a parcel of land for $40,000. To earn a 9% annual rate of return on your investment, how much must you sell the land for in 3 years? Assume annual compounding. (Round to nearest penny, e.g. 1234.56)
An investment will generate $12,000 a year for 30 years. If you can earn 12 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it?-Select-YesNoItem 2 Calculate the present value of investment, if you could earn only 9 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it in this case?
A new investment opportunity for you is an annuity that pays $560 at the beginning of each year for 3 years. You could earn 5.4% on your money in other investments with equal risk. What is the most you should pay for the annuity? Group of answer choices $1,595.40 $1,756.86 $1,517.12 $1,442.76 $1,696.61
You are selling off some of your older business equipment and expect to receive $9,000. You plan on investing it at 5% interest rate, compounded monthly, for 2 years. What is the future value of the investment after 2 years?
You are trying to value the following investment opportunity: The investment will cost you $22151 today. In exchange for your investment you will receive monthly cash payments of $5195 for 9 months. The first payment will occur at the end of the first month. The applicable effective annual interest rate for this investment opportunity is 7%. Calculate the NPV of this investment opportunity. Round to two decimals (do not include the $-sign in your answer).
An investment promises to pay you $40, 000 per year starting five years from today and continuing until the end of year 12. How much would you pay for that investment today assuming a discount rate of 10% ?
You have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $3,000 payments and has an interest rate of 8 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 10 percent, also good for 6 years. How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value
You invest $17,000 at 18% interest, compounded monthly, for 2 years. Use the compound interest formula to calculate the compound amount (in $) for your investment. (Round your answer to the nearest cent.) 2$ Need Help? Master It Read It Watch It

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