Suppose you have an account that will grow to $381,000.00 in 15 years. It grows at 3% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $505,000.00 after 15 years. How much additional monthly contribution should they make to meet their goal?

Suppose you have an account that will grow to $381,000.00 in 15 years. It grows at 3% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $505,000.00 after 15 years. How much additional monthly contribution should they make to meet their goal?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

See similar textbooks

Similar questions

How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Suppose Kylie has an account that will grow to $382,000.00 in 16 years. It grows at 6.4% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $559,000.00 after 16 years. How much additional monthly contribution should they make to meet their goal? A
Suppose you invest $2,000 today and receive $11,000 in five years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $2,000 upfront, but pays an equal amount at the end of each year for the next five years. If this investment has the same IRR as the first one, what is the amount you will receive each year?
Suppose Stephen has an account that will grow to $455,000.00 in 21 years. It grows at 6.7% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $613,000.00 after 21 years. How much additional monthly contribution should they make to meet their goal? Answer: $ |(Round to the nearest cent/penny)
Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? a. What is the internal rate of return (IRR) of this opportunity? The IRR of this opportunity is%. (Round to two decimal places.) b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? The periodic payment that gives the same IRR is $ (Round to the nearest cent.)
How much time will it take you to accumulate $500,000, assuming you invest $15,000 today and $150/ month, and can earn a monthly return of 1%? Next, How would this answer change if there was no upfront investment?
Consider an investment which pays $2,000 at the end of year 1, year 2, and year 3. In year 4, the investment will pay $5,000 and this payment will grow by 4.3% each year forever. If the appropriate interest rate is 7%, what is this investment worth today?
If you invest $5,000 today, you will receive $1,000 in a year, $1,500 each in year 2 and year 3, and $2,000 each in year 4 and year 5. If you require a 10% annual return, should you take the investment.
Suppose that you earn $45,600 per year. What is your monthly salary? $ Assume that you deposit 10% of your monthly salary into an investment account with an APR of 4.8% every month for 30 years. We will assume for simplicity that your salary never changes, so you are depositing the same amount every month for 30 years. What will the balance of your investment account be after 30 years? Round your answer to the nearest cent. The balance of the account is $ How much of the investment account balance is interest? The amount of interest in the account is $
You have an investment opportunity that requires an initial investment of $5,000 today and will pay $6,000 in one year. What is the IRR of this opportunity?
Suppose an investment will pay $21,000 in 29 years from now. If you can earn 11.35% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today?