6) Your daughter is born today, and you want her to be a millionaire by the time she is 35 yearsold. You open an investment account that promises to pay 16% per year. How much moneymust you deposit each year, starting on her 1st birthday and ending on her 35th birthday, soyour daughter will have $1,000,000 by her 35th birthday?NYearI/YCash flow7) The present value of the following cash flow stream is $8,500 discounted at 10 percent annually.What is the value of the missing cash flow?1,000PV1?PMT22,000FV34,0004

To given solution-Explanation:Complete solution.

Answered: 6) Your daughter is born today, and you…

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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Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36 A car dealer offers payment of $525.32 per months for 60 months on a $30,000 car after making a $5000 down payment. What's the loan's APR? a. 10.4798% b. 9.5224% c. 1.9609% d. 0.7935%
4. Suppose you make an annual contribution of BD100 each year to a college education fund for a niece. She is 4 years old now, and you will start next year and make the last deposit when she is 18. The fund is a money market account earning 6.5%/year. What will it be worth immediately after the last deposit? You may also set up spreadsheet solution
(PLEASE ANSWER NUMBER 3) Scenario: Suppose you have a new baby. When the child is 18 years old and ready to attend college, you want to be in a position to contribute $50,000 toward their education. 1. Assume you invest $15,000 in a mutual fund (e.g. money market fund) at an APR of 7% compounded quarterly. How long, to the nearest tenth of a year, will it take the $15,000 to grow to $50,000? Solve using logarithmic equations. Round your answer to the nearest whole number. Explain your results. 2. At the end of 18 years, will your investment have grown to the $50,000 needed for your child’s college fund? 3. Assume you invest $15,000 in a mutual fund (e.g. money market fund) with interest compounded continuously, what rate of interest will you have to earn in order for the $15,000 to grow to $50,000 in 18 years? Round your answer to the nearest tenth of a percent. Explain what this answer means in comparison with the results of #1 and #2 above in terms of the stated goal. 4. Assume your…
SOLVE the following:i. Suppose that your five-year old daughter has just announced her desire toattend college. After some research, you determined that you will need aboutRM 100,000 on her 18th birthday to pay for four years of college. If you canearn 8% annually on your investments, how much do you need to invest todayto achieve your goal?ii. Suppose you have an extra RM100 today that you wish to invest in for oneyear. If you can earn 10% per annum on your investment, how much will youhave in one year?
Your daughter is born today and you want her to be a millionaire by the time she is 35 years old. You open an investment account that promises to pay 12% per year. How much money must you deposit each year, starting on her 1st birthday and ending on her 35th birthday, so your daughter will have $1,000,000 by her 35th birthday? a. $2,317 b.$3,455 c.$5,777 d.$9,450 e.None of these solutions is correct
5. In eighteen years, you require an annuity stream of income that will pay out $100,000 per year for 6 years. You wish to create this annuity stream by putting away a single lump sum today. If your investments will make an average of 7% per year in interest, how much do you need to invest today? (draw the cash flow diagram to help with your calculation)
suppose you are planning to buy a home in 8 years from now that costs you 47114 OMR, How much should you save each year in your bank account that pays 6.012 percent to reach your goal?
Use Excel to solve the following problem. Assume that you are 39 years old planning for your future retirement at age 65. You think that you will be comfortable living on the proceeds from a $1,000,000 401K Retirement Account.a. If your investments grow at an average rate of 6% annually how much must you invest monthly to achieve your projected retirement fund total by the time you retire in 26 years?b. Assuming that when you do retire, you will re-direct your $1,000,000 investment portfolio into less volatile and more secure mutual funds. You expect that, invested in these sources, your portfolio will securely earn 4.5% annually. Based on your assumptions and the normal life expectancy of an American male or female (I determined this to be 81 years old), without consuming any of your principal, how much money will you have on a monthly basis to support your life?(I have worked this problem out on my own, I just want to be sure I applied the formulas and concepts correctly.)
Give the Given, solution and cash flow diagram. Reybien plans ahead for his 10-year-old daughter, Alia. Determine the monthly savings that Reybien should make with the interest of 5.41% per annum to amount P120,000 at the time Alia will be 18. Show your Cash flow diagram. A. P2,013.64 B. P1,234.56 C. P1,007.22 D. P1,457.70
7) You are expecting twins and want to have $500,000 by the time your two kids go to college. You believe you can earn a return of 7%/year. You have nothing saved up. But you can contribute $8,000 each year going forward. How many years will it take you to grow your money to $500,000?
Your friend is considering investing $10,000 starting at the end of year 1 in an investment account and this cash flow will then grow at an annual rate of 4%. She plans on ending her contribution to the investment account at the end of year 10. If the annual return on the investment account is expected to be 10%, the future value of this investment at the end of year 10 will be closest to: O $166,667. O $71,550. $185,583. $100,000.
1. Man wishes his son to receive 200,000 in 10 years from now. What amount should he invest if it will earn invest of 10% compounded annually during the 1st 5 years, and 12% compounded quarterly during the next 5 years? Draw the Cash Flow Diagram

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