Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A person deposits $2000 every year into an account which has an interest rate of 2.5% annually. If this person made their first deposit on August 1, 2000 and plans to make their last on August 1, 2029. How much will be in the account on August 1, 2030?
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- 1.I plan to deposit $376 into my retirement every year for the next 25 years. The first deposit will be made today (that is, at t = 0) and the last deposit will be made at the end of year 24 (that is, at t = 24). I plan to make no other deposits. Assuming that I will earn 12.13% p.a. on my retirement funds, how much money will I have accumulated 36 years from today (that is, at t = 36)? Round your answer to 2 decimal places; record your answer without commas and without a dollar sign. 2. Assume that you deposit $ 1,038 each year for the next 15 years into an account that pays 11 percent per annum. The first deposit will occur one year from today (that is, at t = 1) and the last deposit will occur 15 years from today (that is, at t = 15). How much money will be in the account 15 years from today? Round your answer to 2 decimal places; record your answer without commas and without a dollar sign.arrow_forward6) A couple will need $50, 000 for a down payment on a home in eleven years. They plan to invest $8,000 up front and make a payment at the end of each month for the full eleven years. Assume the account earns 6.89% monthly. (a) How much will the initial deposit be worth in ten years? Round to two decimal places. (b) How much should the monthly payment be? Round to two decimal places.arrow_forwardYou are going to deposit $17,500 today. You will earn an annual rate of 2.7 percent for 8 years, and then earn an annual rate of 2.1 percent for 11 years. How much will you have in your account in 19 years?arrow_forward
- You will make equal deposits into your retirement account each year for 10 years starting now (i.e., years 0–9). If you expect to withdraw $50,000 per year forever beginning 30 years from now, and the funds will earn interest at 10% per year, the size of the 10 deposits is nearest: (a) $4239 (b) $4662 (c) $4974 (d) $5471arrow_forwardIf you decide to deposit $480 every year for the next 6 years, with first deposit to be made one year from today and all deposits to be made at the end of each year, in an account that pays 4.62% APR with annual compounding, how much is this account worth in today's dollars?arrow_forwardIf Alvin invest 5500 to day in a saving account. The money will grow to 8500 at the end of the year 4. Assuming that the interest is paid once per year, the effective annual rate of the invent is a. 12.2 b. 12.9 c. 11.5 d. 13.6 E. 10.8arrow_forward
- If you save $1298 per year for the next 17 years and earn 7.2% interest on your savings, how much will you expect to have at the end of 17 years? Assume deposits are made at the beginning of each year. Give your answer in dollars to the nearest one dollar.arrow_forwardYou have just deposited $12,000 into an account that promises to pay you an annual interest rate of 6.7 percent each year for the next 8 years. You will leave the money invested in the account and 20 years from today, you need to have $44,950 in the account. What annual interest rate must you earn over the last 12 years to accomplish this goal?arrow_forwardHow much do you need to deposit on April 1, 2019, so that you can make a series of monthly withdrawals of $500? The first withdrawal will be made on May 1, 2025, and the last is made on May 1, 2030. The interest rate is 10% compounded monthly.arrow_forward
- You deposit $3375 today in a savings account that pays 6.25% interest, compounded annually. How much will your account be worth at the end of 24 years?arrow_forwardYou have already $5,000 in your savings account today. You want to have $50,000 in your savings account 10 years from today, and you are prepared to make equal annual deposits into the account at the end of each year. If the account pays 5% interest annually, what amount you must deposit each year?arrow_forwardUse the appropriate formula located on Illustration 10-1 on page 209 to solve the problem. Bob deposits $5000 at the end of each 6 months for 14 years in an account paying 6% interest compounded semiannually A) Find the amount he will have on deposit at maturity. B) How much interest did Bob earn? Hint: Find the total amount that was deposited by multiplying the total number deposits with amount of each deposit and then subtracting this from the future value. Show the use of the appropriate formulas for each part by indicating the evaluation of the formula with information and provide the answers. Be sure to parts using the provided letters and organize your work neatly.arrow_forward
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