You receive a $3,000 check from your grandparents for graduation. You decide to save it toward a down payment on a house. You invest it earning 8% per year anyou think you will need to have $6,000 saved for the down payment. How long will it be before the $3,000 has grown to $6,000 ?

Time period can be calculated by using the formula of the future value which tells the value of the…

Answered: You receive a $3,000 check from your…

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

Your savings account currently has $300,000. You would like to withdraw $40,000 a year for the next 5 years to cover living expenses while you endure a PhD program. If the account is expected to earn an annual rate of 10%, how much will you have left in your account once you finish the program? please break down
Your favorite uncle wants to give each of his favorite nieces and nephews $30,000 now while he is still alive so he can appreciate the benefit of the gratitude. Your goal is to save the money he gives you so when you get older you'll have money to start a business. What will be the value of your investment if the rate you can earn on your investment is 10% compounded semi annually for 7 years?
In order to save for your child's college education, you want to save $300 every month for 15 years, starting one month from now. The monthly interest rate on your savings account is 0.4%. How much money will you have in your account in 15 years?
Your parents are giving you $100 a month for four years while you are in college. At a 6% annual discount rate, what are these payments worth to you when you first start college? (show steps, Answer: $4,258.03)
You graduate and receive a $7,000 cheque from your grandparents. You decide to save it toward a down payment on a house. You invest it earning 8% per year, and you think you will need to have $14,000 saved for the down payment. How long will it be before the $7,000 has grown to $14,000? To double the money you received from your grandparents, it will take years. (Round to one decimal place.)
If this family of 4 wants to save up for a vacation in 2 years, how much should they deposit each month into a savings account earning 1.85% annual interest? iF THEY HAVE TO SAVE UP $4580 (Round your answer to the nearest DOLLAR and type it without any commas, dollar signs, ect) If instead they decide to take the vacation now and put it on a credit card, how much would they need to pay each month to cover the cost of this credit card charge after 2 years if their credit card charges an APR of 19% (which is the average APR for new credit cards currently)? (Round your answer to the nearest DOLLAR and type it without any commas, dollar signs, ect) $ How much more will this family pay for their vacation using their credit card instead of saving?
You want to be able to withdraw $40,000 from your account each year for 25 years after you retire. If you expect to retire in 15 years and your account earns 6.6% interest while saving for retirement and 6.2% interest while retired:Round your answers to the nearest cent as needed.a) How much will you need to have when you retire?$b) How much will you need to deposit each month until retirement to achieve your retirement goals?$c) How much did you deposit into you retirement account?$d) How much did you receive in payments during retirement?$e) How much of the money you received was interest?$
Richard just entered a university, and his parents are planning to give him a car upon graduation. How much should they invest into an account with an APR of 10% compounded monthly if they estimate that in four years the car will cost $15,000? Round your answer to the nearest cent.
You are thinking of buying a house beside the College which you will rent to students. You expect to receive $2,000 a month in rental income. Your real estate agent estimates that you will be able to sell the property for $250,000 at the end of 46 months. You'd like a return of at least 0.2% per month. What is the most that you should pay for the house, assuming that you will purchase the house today and receive the first (beginning of month) rental payment today. What is the most that you should pay for the property today? (Round to the nearest dollar.)
Don't give answer in
6) Susan is looking to purchase her first home five years from today. The house costs $1,550,000. She will have to make a down payment of 10% of this amount and plans to take a loan from the bank for the difference. Bank charges are approximately 15% of the loan amount. She plans to start saving from today to cover both the down payment and the bank charges. a. How much will she need to save to cover both the down payment and bank charges? b. If she currently has $195,000 in her account and will make no further deposits over the next five years, what rate of interest must she earn on this account in order to achieve the savings target calculated in part (a) above?
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You receive a $3,000 check from your grandparents for graduation. You decide to save it toward a down payment on a house. You invest it earning 8% per year an you think you will need to have $6,000 saved for the down payment. How long will it be before the $3,000 has grown to $6,000 ?