Your mom asked your opinion if she will be joining the cooperative in her office. She wants to know the amount of money she will be receiving after 6 months and wanted to buy something in December. The cooperative wants her to contribute Pl,000 per month beginning in June 2020 which will earn 3% compounded monthly. How much will be the future value of your mom's contribution at the end of December 2020?

Your mom asked your opinion if she will be joining the cooperative in her office. She wants to know the amount of money she will be receiving after 6 months and wanted to buy something in December. The cooperative wants her to contribute Pl,000 per month beginning in June 2020 which will earn 3% compounded monthly. How much will be the future value of your mom's contribution at the end of December 2020?

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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A student needs to borrow $7,000 to pay for college. She can get a loan at an APR of 10% to paid off in monthly installments over the next 4 years. If she decides to pay the loan off in monthly installments over 3 years instead of 4 years at the given APR, how much money will she save altogether. Round to the nearest cent
Kourtney currently works at Bruin Productions and decide to finally plan for the future, she wants to retire in 10 years, but has not saved for retirement. She wants to have $250,000 when she retires in 10 years. How much should she deposit each month into an account that pays 6.1% annual interest, compunded monthly?
a) Anu wants to put aside an amount at the beginning of each month while working for the next 5 years (60 months). At the end of 60 months, she wants to start a business and she plans to have a budget for it of at least $50,000. How much should she put aside each month if interest payable on her savings is 0.125% per month? [Hint: think about a Geometric Sequence (GP).] (Give your answer to 2 decimal places.) b) Suppose that the sum of $100 is invested at an annual rate of interest of 10%. Calculate the value of the investment in 5 years’ time if the interest is compounded (i) weekly and (ii) semi-annually Show all your calculations. (Give your answer to 2 decimal places.)
Shelly Franks is planning for her retirement, so she is setting up a payout annuity with her bank. She is now 35 years old, and she will retire when she is 65. She wants to receive annual payouts for twenty years, and she wants those payouts to receive an annual COLA of 4%. a. She wants her first payout to have the same purchasing power as does $15,000 today. How big should that payout be if she assumes inflation of 4% per year? b. How much money must she deposit when she is 65 if her money earns 8.3% interest per year? c. How large a monthly payment must she make if she saves for her payout annuity with an ordinary annuity? (The two annuities pay the same interest rate.) d. How large a monthly payment would she make if she waits until she is 40 before starting her ordinary annuity?
A couple wants to retire in 35 years and can save $400 every month. They plan to deposit the money at the end of each month into an account paying 3.55% compounded monthly. How much will they have at the end of the 35 years? Give your answer to the nearest dollar.
Vijaya
Your goal is to retire in 20 years. You plan to start on this path by saving $200 a month. If you earn 6% annually (using monthly compounding), how much will you have saved in 20 years? Right before you started saving, you were notified by your auto insurance company that you will receive a discount of $20 a month on your auto premium because of your impeccable driving record. If you chose to put those savings towards your retirement goal each month, how much would your retirement account be worth if you save $220 a month for 20 years with an annual return of 6% (compounded monthly)? Please discuss your thoughts on the impact of saving an additional $20 a month over 20 years.
Lourdes has just retired and plans to consume $12829 from the retirement account every year for the next 14 years starting one year from today, meeting the rest of the expenses from other resources. If the annual interest rate is 9% compounded bimonthly, how much does Lourdes have in the retirement account today? Send handwritten solutions
Tala McLouf, a 21-year-old BBA graduate, likes to plan for her future ahead, and would like to save $47.50 every week for her retirement later on. At the end of each year, Tala would invest her total accumulated savings into an account at the local credit union paying her a yearly interest rate of 8.25%. How much money will Tala be able to save per year? How much money will Tala have saved when she reaches 55 years old? How much would Tala have saved by the time she is 60 years old, if she starts investing for her retirement at the age of 40 after paying off the mortgage for her house in Los Angeles? Even if Tala starts saving at 40, she would still like to have the same amount of money in her account when she is 60 as she would have had, had she started saving back when she was 21.
Annie would like a retirement income of $4,000 per month (beginning of month payments) for 23 years once she retires. How much must she have in her retirement account on the day she retires if the account can earn 4% compounded semi-annually? Your Answer: Answer
Shelly Franks is planning for her retirement, so she is setting up a payout annuity with her bank. She is now 25 years old, and she will retire when she is 65. She wants to receive annual payouts for twenty years, and she wants those payouts to receive an annual COLA of 2.8%. (a) She wants her first payout to have the same purchasing power as does $14000 today. How big should that payout be if she assumes inflation of 2.8% per year? (b) How much money must she deposit when she is 65 if her money earns 8.1% interest per year? (c) How large a monthly payment must she make if she saves for her payout annuity with an ordinary annuity? (The two annuities pay the same interest rate.) (d) How large a monthly payment would she make if she waits until she is 30 before starting her ordinary annuity?
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