1)Using an interest rate of $4.5% compounded monthly, how much does a company need to deposit now, such that they have the ability to withdaw $5,000 at the start of each quarter and have $50,000 left over in 15 years? 2)Given an interest rate of 2.8% compounded quarterly, what amount is required to be deposited today along with semi-annual contributions of $2,500 such that the cumulative balance in 15 years is $250,000?

1)Using an interest rate of $4.5% compounded monthly, how much does a company need to deposit now, such that they have the ability to withdaw $5,000 at the start of each quarter and have $50,000 left over in 15 years? 2)Given an interest rate of 2.8% compounded quarterly, what amount is required to be deposited today along with semi-annual contributions of $2,500 such that the cumulative balance in 15 years is $250,000?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Similar questions

Suppose $154 is deposited at the end of every year into an account earning 5.5% per annum compounded semi-annually. If the balance in the account is to be $14,700, how many deposits are needed? The number of deposits needed is
What amount must be deposited today, if, starting one year from today, you wish to make 15 equal annual withdrawals of $3,450 from an account offering an annual stated rate of interest r = 0%?
What amount of money must invert in a bank that pay the 25 % annual, capitalizable monthly, with the objective of get, to the final of three years, the addition of $3,000 000.00? Which would is amount Yes the rate it is capitalizable semi-annually?
Suppose that $10,000 is deposited into a saving account that earns 6% interest, compounded annually.a) Assuming that no additional deposits or withdrawals are made, use the appropriate compound interestfactors to determine how much the account will be worth:i) After 5 years;ii) After 20 years. b) Verify that your answers in part (a) are correct by constructing a table or spreadsheet that shows howthe initial deposit will grow each year over 20 years. At a minimum, your table or spreadsheet shouldinclude a row for each year and show: the amount of money in the savings account at the start of each year. the amount of interest earned each year; and the amount of money in the savings account at the end of each year, after interest is paid.Be sure to briefly explain how your table or spreadsheet verifies your results from part (a). c) Again assuming that no additional deposits or withdrawals are made, how many years will it take untilthere is at least $50,000 in the account?
(Please draw cashflow diagram) P45,000 is deposited in a savings account that pays 5% interest compounded semi-annually. Equal annual withdrawals are to be made from the account, beginning one year from now and continuing forever. Compute the maximum amount of the equal annual withdrawal.
RD Inc. projects the following quarterly expenses over a 2-year period of time beginning 3 years and 3 months from now. What quarterly deposits must the company make over the next 3 years to pay these expenses up front? Alternatively, what lump sum deposit could the company make today to fund this future spending? Interest is 8% annual, compounded quarterly. Quarter quarter 0 1 2 3 4 5 6 7 8 cf 0 100000 105000 110000 115000 120000 125000 130000 135000
What is the present value of receiving $1,000 at the end of each year for 6 years, assuming 7% interest compounded annually? What amount must be deposited at the bank today to grow to $300 in 5 years, assuming 14% interest compounded semiannually?
Suppose that $4500 is invested in an account that pays 2% annually and is left for 4 years. 1) How much will be in the account if interest is compunded quarterly? 2) How much will be in the account if interest is compouded continuously?
What is the amount of each payment if Plascote Industries borrows $32,600, at an annual interest of 6.35 percent compounded monthly for 5 years and the first monthly payment is due today?
What is the size of the payments that must be deposited at the beginning of each 6-month period in an account that pays 6.2%, compounded semiannually, so that the account will have a future value of $200,000 at the end of 13 years? (Round your answer to the nearest cent.) $ 3282.24 Need Help? Read It
What amount must be deposited at the bank today to grow to $600 in 4 years, assuming 10% interest compounded semiannually? Please identify which table you used.
How much must be deposited at the beginning of each year in an account that pays 5%, compounded annually, so that the account will contain $32,000 at the end of 3 years? (Round your answer to the nearest cent.)