Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Tuck Hardware Store will have $30,000 payment due in 5 years. How much would they need to invest quarterly in an annuity fund paying 8% to make the $30,000 payment?arrow_forwardProject A costs $5,200 and will generate annual after-tax net cash inflows of $1,700 for five years. What is the NPV using 5% as the discount rate? Round your present value factor to three decimal places and final answer to the nearest dollar.arrow_forward3. You won the lottery! You are considering whether or not to accept a lump sum amount or an annual annuity of $ 79,944 to be received at the end of every year for twelve years. Use 6% as the annual discount rate. How much is the stream of payments worth now? Round your answer to the nearest whole number.arrow_forward
- You have $400,000 to donate to your college. The college's discount rate is 6%. You donate the money today, but you ask the college to delay the scholarship payment so that the first scholarship payment is made 10 years from today. How large will the annual payment be? The annual scholarship payment will be $. (Round to the nearest cent.)arrow_forwardUse the savings plan formula to answer the following question. Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 5%. How much should you deposit monthly to accumulate $88,000 in 12 years? You should invest $ each month. (Do not round until the final answer. Then round to two decimal places as needed.)arrow_forwardUse the savings plan formula to answer the following question. Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 4%. How much should you deposit monthly to accumulate $87,000 in 15 years? You should invest $ each month. (Do not round until the final answer. Then round to two decimal places as needed.)arrow_forward
- Say that you want to establish a scholarship fund that will make fixed payments forever. To fund the scholarship, you plan to make 12 annual contributions of $9.9k to an investment account with an expected return of 6.0% interest annually. Your first contribution occurs today. If the scholarship fund makes its first payment two years following the last contribution, then what is the fixed annual payment that the scholarship fund will award? (Round to the nearest dollar)arrow_forwardyou have just won the lottery and will receive $460,000 in one year. you will receive payments for 21 years, and the payments will increase 4 percent per year. if the appropriate discount rate is 11 percent, what is the present value of your winnings? Please explain how to solve using the financial calculator to show and explain steps thanksarrow_forwardAssume you won the state lottery and you are entitled to $5,000,000. If you choose not to take the money right away but wish to be paid weekly, you estimate that you will want to receive this cash flow over the next 10 years. How much will your weekly payment be at an interest rate of 5% ?arrow_forward
- You are going to invest $1,500 today in a fund today. After 10 years, you want to have exactly $2,500 in the fund. If the interest rate is compounded annually, what interest rate is needed to achieve this?arrow_forwardAn investment of 1000 is to be used to make payments of 100 at the end of every year for as long as possible. If the fund earns an annual effective rate of interest of 6%, find how many regular payments can be made. Also, find the amount of the smaller payment to be paid on the date of the last regular payment to be paid one year after the last regular paymentarrow_forwardAssume that you want to have $ 2650 saved in a sinking fund in 1 year. The account pays 4.5% compounded monthly. What should be your monthly payments?arrow_forward
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