You plan to deposit $900 PER YEAR into an account earning 5.25% interest compounded annually. How much money will be in the account after 6 years, assuming the deposits are made at the BEGINNING of each year?
You plan to deposit $900 PER YEAR into an account earning 5.25% interest compounded annually. How much money will be in the account after 6 years, assuming the deposits are made at the BEGINNING of each year?
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:Please indicate what you entered into your calculator to solve these problems.
1.
You graduated with $28,000 in school loans. You will make annual payments of
$4,000 at the beginning of each year for the next 10 years. What annual rate of
interest are you being charged on your school loans?
2.
You bought equipment for $23,000 and agreed to make monthly payments at the end
of each quarter for 5 years. Assuming you are being charged 9% interest
compounded QUARTERLY, how much will your QUARTERLY payments be?
3.
You currently have $750,000 in your building fund. If you start depositing an
additional $20,000 per year into this account at the beginning of each year, how
much will be in the account after 6 years assuming 5.5% interest compounded
annually?
4.
You want to start saving for a new car and have decided to put S$90 per month at the
beginning of each month into an account which earns 6% compounded monthly. You
would like to be able to buy a car for $25,000. (a) How many deposits will you have to
make to reach your $25,000 goal? (b) How many years will that be?
5.
Mr. Smith wants to be able to withdraw $80,000 per year at the end of each year from
his retirement account for 30 years after he retires. Assuming a 7% annual compound
interest rate, what is the minimum amount Mr. Smith must have in this account when
he retires?
Transcribed Image Text:Please indicate what you entered into your calculator to solve these problems.
1.
You opened an account with $20,000. You want to have $28,000 at the end of 9
years. At what interest rate must you invest your money in order to reach your goal?
2.
You plan to create an account with an opening balance of $5,000. This account earns
8% interest compounded semiannually, how much money will you have in this
account at the end of 7 years?
3.
You want to buy a new piece of equipment in three years. You estimate the machine
will cost $85,000. You can invest money into an account earning 6% compounded
MONTHLY. How much will you need to put into the account today in order to be
able to buy the new piece of equipment?
4.
You currently have $17,155 in an account but you need $40,000. If your account earns
8% interest compounded annually, how many years will it take to reach your goal?
5.
You plan to deposit $900 PER YEAR into an account earning 5.25% interest
compounded annually. How much money will be in the account after 6 years,
assuming the deposits are made at the BEGINNING of each year?
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