Your brother has offered to give you either $35,000 today or $70,000 in 11 years. If the interest rate is 6% per year, which option is preferable? The present value of the future amount (amount received in 11 years) is $ (Round to the nearest dollar.)

Your brother has offered to give you either $35,000 today or $70,000 in 11 years. If the interest rate is 6% per year, which option is preferable? The present value of the future amount (amount received in 11 years) is $ (Round to the nearest dollar.)

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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Assume that you contribute $300 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $500 per month for the next 25 years. Given a 9.0 percent interest rate, what is the value of your retirement plan after the 40 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value of multiple annuities $ 51,158 72
You are offered an annuity that will pay $10,000 a year for ten years (that is, ten payments), but the payments start after five years have elapsed. If you want to earn 8 percent on your funds, what is the maximum you should pay for this annuity? Show formula and all working
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $7,100 of income a year for 15 years, with the first payment coming immediately. The going rate on such annuities is 15.25%. How much would it cost him to buy the annuity today?Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.
Assume that you contribute $390 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $780 per month for another 25 years. Given a 6.0 percent interest rate, what is the value of your retirement plan after the 40 years?
You have just received a windfall from an investment you made in a friend's business. He will be paying you $17,752 at the end of this year, $35,504 at the end of the following year, and $53,256 at the end of the year after that (three years from today). The interest rate is 11.7% per year. a. What is the present value of b. What is the future value of your windfall in three years (on the date of the last payment)? your windfall? a. What is the present value of your windfall? The present value of your windfall is $ (Round to the nearest dollar.) b. What is the future value of your windfall in three years (on the date of the last payment)? The future value of your windfall in three years is $ (Round to the nearest dollar.)
Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase the contribution to $258 per month for another 20 years, and finally, $408 per month for the last 10 years. Given a 7 percent interest rate, what is the value of your retirement plan after the 50 years?
suppose you are offered the following three accounts to invest $10,000 for 20 years: 18% simple interst and 5% interest compounded monthly. which is the besr choice?
suppose you are buying your first condo for 145,000 and you will make $15,000 down payment. you have arranged to finnace the remainder with a 30 year monthly payment amortized mortgage at a 55 nominal interest rate with first payment due in one month what will your monthly payments be? how much of first month payment is the prindipal
You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay you a 5% compound rate of return per year for 6 years. If you pay $20,000 for the GIC today and receive no interest along the way, you will get __________ in 6 years (to the nearest dollar). (Round your answer to the nearest whole dollar).
Sanka Blunck wants to receive $8,000 each year for 20 years. How much must Sanka invest today at 4% interest compounded annually? (Use Table 13.2.) (Round your answer to the nearest cent.) Sanka invest
You are offered an annuity that will pay $5,420 per quarter for 8 years (first payment made today). If you feel that the appropriate discount rate is 13%, what is the annuity worth to you today?
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