You want to make 5 equal deposits into an account paying 7.5 percent so that your child can take out $14,000 per year for college expenses. Your deposits will be at t-1, t=2, t-3, t-4, and t=5. Your child will make withdrawals of $14,000 at t=7, t-8, t-9, and t-10. Assume no inflation of college expenses. How much will you need to deposit each of the next 5 years? t = 0 7 W W 1 2 9 8 D W D W 3 10 D 5 D D 6

You want to make 5 equal deposits into an account paying 7.5 percent so that your child can take out $14,000 per year for college expenses. Your deposits will be at t-1, t=2, t-3, t-4, and t=5. Your child will make withdrawals of $14,000 at t=7, t-8, t-9, and t-10. Assume no inflation of college expenses. How much will you need to deposit each of the next 5 years? t = 0 7 W W 1 2 9 8 D W D W 3 10 D 5 D D 6

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

Pretend that you are saving up for a down payment on a car or house. Pretend that we get an inheritance of $4,000 so we put the inheritance in a special bank account that pays 4.00% APR compounded quarterly for four-years. We also decide to save $400 a quarter into this savings account to help grow our down payment. a. How much money do we have in our savings account at the end of all these years? b. How much interest do we earn in total?
Tony Ring wants to attend Northeast College. He will need $65,000 4 years from today. Assume Tony's bank pays 12% interest compounded semiannually. What must Tony deposit today so he will have $65,000 in 4 years? (Use the Table 12.3 provided.) Note: Do not round intermediate calculations. Round your answer to the nearest dollar amount.
Raymond wants to save the college tuition fees his child will need in ten years by starting with a deposit of $7,500 today and depositing another $200 at the beginning of each month. How much will Raymond have in ten years if he gets a rate of return of 4% per annum? a. $37,201 b. $39,057 c. $40,537 d. $40,441
You plan to send your first born child to DePaul for a 4-year degree with 4 annual payments. Your first payment will start in 25 years in the amount of $ 58,982.71 and grow by 9% per year. Assuming a discount rate of 6%. You start saving in one year from now a fixed amount for 20 total deposits. What is the amount of that annual savings deposit in order to save enough to fund the education? Use the $ symbol and round to the nearest thousand dollars. A correct answer would look like $13,000.
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 daughter will start college one year from today, at which time the first tuition payment of \$58,000$58,000 must be made. Assume that tuition does not increase over time and that your daughter remains in school for four years. How much money do you need today in your savings account, earning 5\%5% per annum, in order to make the tuition payments over the next four years, provided that you have to pay 35\%35% per annum in taxes on any earnings (e.g., interest on the savings)?
You invest $2000 today at 7% per year. If you leave thisfor your grandchildren by not touching the account for80 years, what is the amount of interest on interestearned for this investment? Please explain how to do this problem in the financial calculator. The most important thing is that I understand how to solve the problem on my own
Question - : Your child is going to college for the next 4 years. You are setting up a college fund that your child withdraws from at the BEGINNING of each 6 month period (2 withdrawls each year). Each withdrawl is $ 3000. The account pays 12% annual interest rate, compounded 2 times a year. How much money should you put in the account now?
You are preparing for your retirement and have decided to begin saving early. Based on your research, you've determined that you will require $3,000 per month to cover your living expenses during retirement. a. How much money do you need when you retire if you place all of it in a compound interest account that earns 7% compounded monthly, and is living off the interest only? (What is the required retirement savings amount that can generate your monthly living expenses as interest income?)
1. What is the amount you would have to deposit today to be able to take out $2070 a year for 2 years from an account earning 14 percent. 2. If you desire to have $38300 for a down payment for a house in 11 years, what amount would you need to deposit today? Assume that your money will earn 4 percent.
You want to be able to withdraw $20,000 each year for 30 years. Your account earns 5% interest. How much do you need in your account in the beginning? how much total money will you pull out of the account? how much of that money is interest?
Use the savings plan formula to answer the following question. Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 5%. How much should you deposit monthly to accumulate $88,000 in 12 years? You should invest $ each month. (Do not round until the final answer. Then round to two decimal places as needed.)

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