You are saving for a fabulous vacation to your favorite tropical destination.You intend to travel in 4 years. You think you can earn 5.3% on yourinvestment. How much do you need to deposit today to have $5,500 tobring you and a guest on vacation in four years?-$19,367.58O-$4,473.52O-$6,762.02-$5,050.30

Present value illustrates the current value of a sum of money that will be received or paid in the…

Answered: You are saving for a fabulous vacation…

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 and your sister are planning a large anniversary party 3 years from today for your parents' 50th wedding anniversary. You have estimated that you will need $6,500 for this party. You can earn 2.6 percent compounded annually on your savings. How much would you and your sister have to deposit today in one lump sum to pay for the entire party? Can the excel and calculator solution be provided?
Your mother has asked you to help her with an investment. She has $6,000 to invest today for 3 years. You've identified a CD at a bank that pays a nominal rate of interest of 5.08%, with interest paid quarterly. What will be the value of this investment 3 years from now?
You plan to graduate in 4 years, and then travel to Italy for 3 weeks. The trip will cost $1,500. If you can earn an annual interest rate of 8%, how much do you have to save right now to have enough money for your trip? Instead, the interest rate is 0.667% per month. How much do you need to save right now?
You currently have $12,000 saved up in your bank account. You believe that 2 years from now, some of your generous relatives will give you a combined gift of $5,000 as a college graduation present. If you can earn 4.5% annual compound interest on your savings, how many years will it take you, from today, to be able to afford the car you'd like to purchase, which costs $25,000?
A young engineer wants to surprise her husband with a European vacation for their tenth anniversary, which is five years from now. She determine that the trip will cost $7,000. Assuming an interest rate of 5.5% compounded daily, approximately how much money does she need to deposit today for the trip?
Three years ago ABC issued a high - yield bond with a coupon rate of 14%, paying semi-annual coupons. When originally issued the bond was sold at par and had five years until maturity. Currently, ABC bonds have a yield - to - maturity of 16%, and the next coupon payment is in 6 month from today. By how much is the duration of ABC bonds higher than that of an XYZ rated zero - coupon bond with an interest rate of 9% (APR, annually compounded) and 18 months until maturity? Note, report a negative number if LPH has the lower duration of the two bonds.
) How long would it take for you to save an adequate amount for travelling around the world, if you deposit $40,000 per year into an account beginning one year from today that pays 20% per year if you wish to have a total of $1,000,000 at the beginning of your travel?(
You are just starting your first job out of college. You and your best friend are competing to see who will have more in their savings when you retire; you both plan to retire at age 52, just 30 years out. You will need $5 million to retire. If you average an annual return of 7% on your investment, how much do you need to put into retirement savings on an annual basis?
You wish to purchase some equipment for a new business venture. You plan to save $35,000 per year. You will make 5 deposits in an account that pays 8.25%. Required: Determine how much you will have 5 years from today? Please show all working.
you would like to have in 5 years a total of $5000 for a trip knowing that you can invest a simple interest rate of 4%. how much should you invest today.
In three years you plan to take a family vacation to Florida at an estimated cost of $3500. If you can earn an average of 4% per year, how much must you invest today to have the funds needed for the planned vacation? O A. $3,937 O B. $3,920 O c. $3,111 O D. $3,125 Question Viewer

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You are saving for a fabulous vacation to your favorite tropical destination. You intend to travel in 4 years. You think you can earn 5.3% on your investment. How much do you need to deposit today to have $5,500 to bring you and a guest on vacation in four years?