You plan to buy the new iPhone when it is released 6 months from now. You believe itwill sell for $999 dollars. You know that you will need to cut back on other expendituresto ensure you have the money ready upon release and decide to start skipping someof your daily Starbucks purchases to afford the new phone. Your usual Starbucks ordercosts $5. The money you save will earn an interest rate of .5% a month. How manyStarbucks coffees each month do you need to sacrifice in order to have saved the $999for your new phone?

Number of months until the iPhone release: 6 monthsCost of the iPhone: $999Interest rate per month:…

Answered: You plan to buy the new iPhone when it…

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

Nicole wants to save 3500 dollars in the next 2 years to go on a backpacking trip. Interest on her account is 3.6% compunded monthly. How much does she need to deposit at the end of each month?
You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $300. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent.$ What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent. $
Minnie needs to buy a refrigerator. The refrigerator Minnie wants requires a down payment of $2000. The refrigerator is purchased on time, with Minnie planning to pay $2000 at the end of one year and $4000 at the end of 4 years. What is the cash price of the refrigerator if the interest rate is 10% compounded monthly? (Cash = Now)
Do you want to be one of the first people to take a commercial flight to outer space which means that you need to save $3522922. However, currently only have 2333723 in your savings account. Based on an analysis of your monthly budget, you can find a way to add 3437 per month to your account until you have enough. You can earn on average 12.2% APR in your account, compounded monthly how many years will you need to work before you can experience the weightlessness of the final frontier?
You want to by a boat and can afford payments of $350 per month for six years. The monthly interest rate is 0.5%. (a) What is the maximum you can spend on the boat if there is no down payment? (b) What is the maximum you can spend on the boat if you make a down payment of $6000 at the time of purchase? 4. A company needs to buy a building in 4 years, and must fund the down payment from its profits. The purchase will cost $280,000, of which the company can finance (borrow from the bank) $200,000 at 7%. If the company must make the purchase in 4 years and can receive 7% APR on its savings compounded annually, how much must the company save each year to have the required down payment in 4 years?
You currently don't have a car, but rent a car that's parked just outside your house whenever you need one. Your annual expenditure on rental cars is $2,600. You are now considering purchasing a car that would give you the same level of convenience as your current life style. The car costs $27,000 and can be sold for $5,000 after 10 years. You'd purchase the car with money from your savings account which always earns an interest rate of 6%. Assume that all cash flows occur at the end of each year (maybe because you drive much more around Thanksgiving and Christmas.
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?
Ernie Bilko has a business idea. He wants to rent an abandoned gas station for just the months of November and December. He will convert the gas station into a drive-through Christmas wrapping station. Customers will drive in, drop off their gifts, return the next day, and pick up their wrapped gifts. He needs $331,700 to rent the gas station, purchase wrapping paper, hire workers, and advertise. If he borrows this amount at 6.5 interest for those two months, what size lump sum payment will he have to make to pay off the loan? (Round your answer to the nearest cent.) $ _______
After a successful year for your beach shop, you are wondering whether to open one more store this year. There are equal chances for the coming summer to be rainy or sunny. If the weather is sunny, you will earn $90,000 in profits per store. However, if the weather is rainy, your profit will be $60,000 if you open one store and zero if you open two stores. What is your expected profit under complete information? O A. $75,000 O B. $180,000 OC. $150,000 O D. $120,000
Sultan’s Used Cars just sold you a clunker (you need it to get to class on time). You financed the $8,000 purchase price for 48 months. They said your payment would be $250. What interest rate did they charge you (assume monthly compounding)?
You need to buy a new laundry center with a price of $ 22,000 because the one you had no longer works and has no repair, at the moment you do not have the cash available to buy it, so you went to a department store to buy it on credit, The store offers you to pay for the laundry center in 24 months with an annual rate of 17%. What is the amount you will have to pay monthly? Note: Step by step to get to the result, do not skip anything.Note2: If it can be done in excel it is better
The local electronics store is offering a promotion "1-year: same as cash," meaning that you can buy a TV now, and wait a year to pay (with no interest). So, if you take home a $1,200 TV today, you will owe them $1,200 in one year. If your bank is offering 4% interest, what is the true cost of the TV to you today? The true cost of the TV to you today is $ (Round to the nearest cent.)

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