Your client has been given a trust fund valued at $1.19 million. He cannot access the money until he turns 65 years old, which is in 30 years. At that time, he can withdraw $20,500 per month. If the trust fund is invested at a 4.0 percent rate, how many months will it last your client once he starts to withdraw the money? Note: Assume annual compounding. Do not round Intermediate calculations and round your final answer to 2 decimal places. Number of months

Your client has been given a trust fund valued at $1.19 million. He cannot access the money until he turns 65 years old, which is in 30 years. At that time, he can withdraw $20,500 per month. If the trust fund is invested at a 4.0 percent rate, how many months will it last your client once he starts to withdraw the money? Note: Assume annual compounding. Do not round Intermediate calculations and round your final answer to 2 decimal places. Number of months

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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Mr. Gordon plans to invest $400 at the end of each month in an account that pays 6%, compounded monthly. After how many months will the account be worth $30,000? (a) State whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer UP to the nearest month.)
If you invest $17,500 today, how much will you have in each of the following instances? Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. In 7 years at 8 percent? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Future value b. In 18 years at 7 percent? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Future value c. In 25 years at 6 percent? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Future value d. In 20 years at 6 percent (compounded semiannually)? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Future value
If you invest $9,400 per period for the following number of periods, how much would you have in each of the following instances? Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. In 12 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) In 25 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Starting next year, you will need $15,000 annually for 4 years to complete your education. (One year from today you will withdraw the first $15,000.) Your uncle deposits an amount today in a bank paying 5% annual interest, which will provide the needed $15,000 payments. How large must the deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will be in the account immediately after you make the first withdrawal? Do not round intermediate calculations. Round your answer to the nearest cent. $
You have just made your first $4,300 contribution to your retirement account. Assume you earn a return of 12 percent per year and make no additional contributions. a. What will your account be worth when you retire in 28 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if you wait 10 years before contributing? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Simone's small business has accumulated $14,750 of excess cash that will not be needed until a new plece of equipment is purchased. What will be the maturity value If she Invests the funds in a 120-day term deposit paying an interest rate of 1.35 %? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Maturity value
← Suppose you start saving today for a $45,000 down payment that you plan to make on a house in 6 years. Assume that you make no deposits into the account after the initial deposit. For the account described below, how much would you have to deposit now to reach your $45,000 goal in 6 years. An account with daily compounding and an APR of 4% D You should invest $ (Do not round until the final answer. Then round to two decimal places as needed.)
If you invest $17,500 today, how much will you have in each of the following instances? Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. In 7 years at 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Future value b. In 18 years at 7 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Future value Future value Val HOME c. In 25 years at 6 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 1 ARNE Inil STA Boll Com te doen Monta Panta BBELL Aaron Alfal amphenie dit ou Munimin is magna. Menin that dimin ilmais mmmmm ana multzal mmmmm
An investor is considering an investment that will pay $2,170 at the end of each year for the next 10 years. He expects to earn a return of 12 percent on his investment, compounded annually. Required: a. How much should he pay today for the investment? b. How much should he pay if the investment returns are received at the beginning of each year? (For all requirements, do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) a. Present value of ordinary annuity b. Present value of annuity due
Simone's small business has accumulated $14,750 of excess cash that will not be needed until a new piece of equipment is purchased. What will be the maturity value if she invests the funds in a 120-day term deposit paying an interest rate of 1.35%? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Maturity value
Suppose you inherited $100,000 and invested it at 7% per year. What is the most you could withdraw at the end of each of the next 10 years and have a zero balance at Year 10? How would your answer change if you made withdrawals at the beginning of each year? SHOW WORK AND USE FINANCIAL CALCULATOR
After learning about the time value of money, you decided to open a retirement account. You will invest $475 each month. It earns an annual interest rate of 10.8% per year. Your first deposit will be made one month from now. What is the value of your account in 33 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Retirement account value

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