Your grandfather has offered you a choice of one of the three following alternatives: $11,500 now; $5,700 a year for five years; or $71,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. Assuming you could earn 9 percent annually, compute the present value of each alternative: Note: Do not round Intermediate calculations. Round your final answers to 2 decimal places. $ 11,500 $ 5,700 $ 71,000 a-2. Which alternative should you choose? $ $ Present Value b-1. If you could earn 10 percent annually, compute the present value of each alternative: Note: Do not round Intermediate calculations. Round your final answers to 2 decimal places. 69 $71,000 received at end of five years $5,700 received each year for five years $11,500 received now 11,500 5,700 71,000 Present Value b-2. Which alternative should you choose? $71,000 received at end of five years $5,700 received each year for five years O $11,500 received now

Your grandfather has offered you a choice of one of the three following alternatives: $11,500 now; $5,700 a year for five years; or $71,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. Assuming you could earn 9 percent annually, compute the present value of each alternative: Note: Do not round Intermediate calculations. Round your final answers to 2 decimal places. $ 11,500 $ 5,700 $ 71,000 a-2. Which alternative should you choose? $ $ Present Value b-1. If you could earn 10 percent annually, compute the present value of each alternative: Note: Do not round Intermediate calculations. Round your final answers to 2 decimal places. 69 $71,000 received at end of five years $5,700 received each year for five years $11,500 received now 11,500 5,700 71,000 Present Value b-2. Which alternative should you choose? $71,000 received at end of five years $5,700 received each year for five years O $11,500 received now

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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You have your choice of two investment accounts. Investment A is a 7-year annuity that features end-of-month $2,900 payments and has an APR of 6 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 6 percent, also good for 7 years. How much money would you need to invest in B today for it to be worth as much as Investment A 7 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
You expect to receive $29,000 at graduation in two years. You plan on investing it at 10 percent until you have $164,000. How long will you wait from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
show all excel formulas/ work answering the following: Saving For Retirement You are offered the opportunity to put some money away for retirement. You will receive five annual payments of $25,000 each beginning in 40 years. How much would you be willing to invest today if you desire an interest rate of 12%?
A local entreprenuer asks you to invest $10,000 in a business venture. Based on your estimate, you would receive nothing for three years at the end of the four you would receive $4900, and at the end of year five you would receive $14500. If you estimates are correct, what would be the IRR on this investmenet?
You expect to receive an inheritance of $50,000 (actual) six years from now. What is its present worth at a real interest rate of 4% per year and an inflation rate of 3% per year. Please workout and do not use excel or if you use excel shows steps and formulas thank you!
If you invest $10,000 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. In 50 years at 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
You are offered the following two choices. You can either receive Option I: 3 annual payments of $100 each to be received exactly 1, 2, and 3 years from now; Or, Option II: one payment of $269 to be received exactly one year from now. The annual interest rate (as an EAR) that would make you indifferent between receiving the above two options is _______%.
Your grandfather has offered you a choice of one of the three following alternatives: $10,000 now; $4,800 a year for eight years; or $56,000 at the end of eight years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. Assuming you could earn 9 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) a-2. Which alternative should you choose? multiple choice 1 $56,000 received at end of eight years $4,800 received each year for eight years $10,000 received now b-1. If you could earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) b-2. Which alternative should you choose? multiple choice 2 $56,000 received at end of eight years $4,800 received each year…
In an attempt to have funds for a down payment in four years, James Dupont plans to save $3,700 a year for the next four years. With an interest rate of 6 percent, what amount will James have available for a down payment after the four years? Use Exhibit 1-B. (Round FVA factor to 3 decimal places and final answer to 2 decimal places.) Future value down payment
Compute the monthly payment and the total amount spent for a vehicle that costs $24,000 if you finance the entire purchase over 5 years at an annual rate of 8 25 percent. Calculate the payment if you finance the car for only four years. Finally, calculate the payment for three years. What do you notice about the payment under the different time assumptions? Note: Round intermediate computations to at least five (5) decimal places Click on the table icon to view the MILPF table The monthly payment, PMT, on the 5-year auto loan is $ (Round to the nearest cent.) The total amount spent if you financed $24,000 for 5 years at 8 25 percent per year is $ (Round to the nearest cent.) The monthly payment, PMT, on the 4-year auto loan is $ (Round to the nearest cent.) Finally, the monthly payment, PMT, on the 3-year auto loan is $ (Round to the nearest cent.) What do you notice about the payment under the different time assumptions? (Select the best choice below.) OA. As the number of payments…

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