28. You plan to make 40-quarterly deposits into a fund in order to have $10,000 at the end of 10 years.Consider the following 3 cases:Deposit SR, starting today; earn j4 = x%Deposit $R starting 3-months from today; earn ja = x%Deposit $Rm starting 3-months from today; earn j12 = x%Which of the following is true?(1)(II)(III)(A) R₁ > Ru; Rn < Rm(C) R₁ < Ru Rn < Rm(B) R₁ > Ru Rn > Rm(D) R₁ Rm

Future value of money is the amount of deposit made and amount of interest accumulated over the…

Answered: 28. You plan to make 40-quarterly…

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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Example 26a (Varying Force of Interest) A fund earns interest at a force of interest 8, = kt . A deposit of RM100 at time t=0 will grow to RM250 at the end of 5 years. Determine k.
4. ( Fund A earns interest at a simple rate of i% a year. $P is invested in fund A. (a) What is the accumulated value in fund A at time t years. (b) Calculate the effective rate of interest in year 1, year 2 and year 3. Solution:
13. hat Corp. establishing a fund where they pay $200 annually (ie. every year) into the fund. The interest rate thst the fund earns is an annual rate of 6%. What will be the balance of the fund at the end of the 5 years? Round to the nearest dollar. please also explain that formula(s) you used and variable inputs.
Qla) Determine the amount to be deposited in a fund now that earns 9% per year to provide for eight end of year withdrawals of RM187.45 each? Include the cash flow diagram in your calculation.
Find the monthly payment R needed to have a sinking fund accumulate the future value A. The yearly interest rate r and the time t in years are given below. Interest is compounded monthly. A= $9,000; r=7%; t= 1 R=$ (Round up to the nearest cent.) ue ue ie Enter your answer in the answer box and then click Check Answer. ue All parts showing Clear All Check Answer To see what to study next, go to your Study Plan. 99- a
You invest money in a fund that paid 9% simple interest paid annually. If it is worth $21,200.00 in 11 months, a) what is the present value? $ b) What is the rate of return? (answer as a percent 2 decimal places)
What is the equivalent average annual effective rate of interest over 5-year period if the fund earns d^{(4)} = 4% for the initial 1 year, d^{(12)} = 6% for the next 2 years, and i^{(6)} = 9% in the last 2 years?
2) Fund X earns i(12) = 6% interest, while Fund Y earns i(12) = 3% interest (and both start off with no money in them). You deposit $1000 into fund X at the end of each month for 20 years and at the end of each month, withdraw the month's interest and deposit it into fund Y. Find the accumulated value in fund Y at the end of the 20 years. Also fill in the following table Month 1 3 239 240 ... Amount in ..... 1st account Amount deposited .... into 2nd account
6. Computing Future Value of Annual Deposits. What amount would you have if you L deposited $2,500 a year for 30 years at 8 percent (compounded annually)? (Use time value of money calculations in Chapter 1 Appendix.) e here to search 17 to 4M to 144 16 40 73 14 I01 12 米 E T 00 86 R 4. 24 3.
You deposit the following at the end of each year into a growth mutualfund that earns 11 percent per year:Year Deposit ($)1 4,0002 3,5003 2,5004 2,0005 1,700 ======== $13,700a. How much should the fund be worth at the end of 5 years?b. How much interest have you earned in total?
You are contemplating investing some surplus funds and the followingoptions are available: Show manual computation1. Invest $50,000 @ 4% p.a. compounded annually for 5 years.2. Invest $45,000 @ 3% p.a. compounded quarterly for 5 years.3. Invest $40,000 @ 4.5% p.a. compounded semi-annually for 5 years.4. Invest $50,000 @ 3% p.a. compounded semi-annually for 5 years.5. Invest $55,000 @ 0.5% p.a. compounded weekly for 5 yearsWhich one of the above is the second-best option?
Suppose you are given the following cash flow stream. If the interest rate is 20 percent, what is the future value of this cash flow stream at the end of Year 3? Year CF 10 $0 1 $344 2 $314 3 $290 Enter your answer rounded off to two decimal places. Do not enter $ in the answer box.

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