Your company needs $500,000 in two years' time for renovations and can earn 9% on investments. a) What is the present value of the renovations? (This part of the problem can be answered with just Chapter 1 ideas.) b) If your company deposits money continuously at a constant rate throughout the two-year period, at what monthly rate should the money be deposited so that you have the $500,000 when you need it?
Your company needs $500,000 in two years' time for renovations and can earn 9% on investments. a) What is the present value of the renovations? (This part of the problem can be answered with just Chapter 1 ideas.) b) If your company deposits money continuously at a constant rate throughout the two-year period, at what monthly rate should the money be deposited so that you have the $500,000 when you need it?
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
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Transcribed Image Text:3) Your company needs $500,000 in two years' time for renovations and can earn 9% on investments.
a) What is the present value of the renovations? (This part of the problem can be answered with just Chapter 1
ideas.)
b) If your company deposits money continuously at a constant rate throughout the two-year period, at what
monthly rate should the money be deposited so that you have the $500,000 when you need it?
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