The role of investment in personal financial planning process and the various objectives of investment.

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Answer 1

Question

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

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Students have asked these similar questions

A. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 10 percent per year.B. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of the current year.C. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of five years. I need help solving question C on a financial calculator.

John wants to buy a property for $105,000 and wants an 80 percent loan for $84,000. A lenderindicates that a fully amortizing loan can be obtained for 30 years (360 months) at 6 percentinterest; however, a loan fee of $3,500 will also be necessary for John to obtain the loan.a. How much will the lender actually disburse?b. What is the APR for the borrower, assuming that the mortgage is paid off after 30 years (fullterm)?c. If John pays off the loan after five years, what is the effective interest rate? Why is it differ-ent from the effective interest rate in (b)?d. Assume the lender also imposes a prepayment penalty of 2 percent of the outstanding loanbalance if the loan is repaid within eight years of closing. If John repays the loan after fiveyears with the prepayment penalty, what is the effective interest rate?

It is now January 1. You plan to make a total of 5 deposits of $500 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 14% but uses semiannual compounding. You plan to leave the money in the bank for 10 years. Round your answers to the nearest cent. 1. How much will be in your account after 10 years? 2. You must make a payment of $1,280.02 in 10 years. To get the money for this payment, you will make five equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 14% with quarterly compounding. How large must each of the five payments be?

Answer 2

Question

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

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Answer 3

Question

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

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Answer 4

Question

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

Answer 6

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

Answer 7

Chapter 11, Problem 1LO

Summary Introduction

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Answer 8

Expert Solution & Answer

Explanation of Solution

Financial planning process is related to estimating the financial need of an individual over a period of time to achieve the desired objectives. It may include the purchase of a four wheeler, a house or to plan for the comfortable retirement. Investing helps in achieving these objectives by accumulating the funds over the defined period of time. Individual estimates the funds required to achieve the objective and the time period after which the fund is required. On the basis of requirement the investment option is chosen so as to leave the individual with the desired amount at that time. Individual may invest the lumpsum or select to invest in systematic manner at a required rate of return with minimum risk. Various investing techniques are employed to determine the amount required to be invested so as to yield the desired amount. It helps to meet the long term high financial needs with ease.

Various objectives that are associated with the investment are as follows:

To enhance the amount of current income by investing in the various options in the form of dividends or interests so as to meet the living expenses is one of the objectives of investment. Retired people seek to earn the regular income by investing in the plans yielding higher returns at lower risk.

Individuals invest for the purpose of making a major purchase such as down payment for the purchase of a house, meet the expenses of child’s college education, initiating a business, meeting retirement requirements and so on.

The individuals invest in the various investing options in order to accumulate funds for meeting the retirement needs.

Some of the investment options are deductible from the taxable income thus, reducing the tax liability of the individual. So, individual invest with the objective to gain out of the tax shelters.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 11 - Prob. 1LO Ch. 11 - Prob. 2LO Ch. 11 - Prob. 3LO Ch. 11 - Prob. 4LO Ch. 11 - Prob. 5LO Ch. 11 - Describe an investment portfolio and how youd go...Ch. 11 - CALCULATE AMOUNT TO INEST TO MEET OBJECTIES. Use...Ch. 11 - Why do you suppose that well-known companies such...Ch. 11 - Prob. 3FPE Ch. 11 - Prob. 4FPE

The role of investment in personal financial planning process and the various objectives of investment.

To determine: The role of investment in personal financial planning process and the various objectives of investment.

Explanation of Solution

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Chapter 11 Solutions