A small company wishes to set up a fund thatcan be used for technology purchases overthe next 6 years. Their forecast is for $9,000 tobe needed at the end of year 1, increasing by5% each year thereafter. The fund earns 10%per year. How much money must bedeposited to the fund at the end of year 0 tojust deplete the fund after the lastwithdrawal?

When the annuity amount is growing at a constant rate, present value of growing annuity formula is…

A small company wishes to set up a fund th can be used for technology purchases over the next 6 years. Their forecast is for $9,000 be needed at the end of year 1, increasing E 5% each year thereafter. The fund earns 10° per year. How much money must be deposited to the fund at the end of year 0t just deplete the fund after the last

A small company wishes to set up a fund th can be used for technology purchases over the next 6 years. Their forecast is for $9,000 be needed at the end of year 1, increasing E 5% each year thereafter. The fund earns 10° per year. How much money must be deposited to the fund at the end of year 0t just deplete the fund after the last

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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Similar questions

Incognito Company is contemplating the purchase of a machine that provides it with cash savings of $93,000 per year for five years. Interest is 11%. Assume the cash savings.occur at the end of each year. Required: Calculate the present value of the cash savings. Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Present value
Project A costs $5,300 and will generate annual after-tax net cash inflows of $1,900 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. (Click here to see present value and future value tables) 2,928 x
An 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 payment
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Acouplewouldliketohave$150,000attheendof7 1/2 years. They can invest $25,000 now and make additional contributions at the end of each month over the 7 1/2 years. If the investment earns 7.2% compounded monthly, what size payments will enable them to reach their goal? Round your answer to the nearest cent.
A back load fund has initial load of 5% and it will decline by 1% each year after the initial purchase. If you take your money out at the end of year 3, what is the cost of the load if you invested $10,000 in the fund with initial NAV of $23 and adjusted NAV of $36.8 at the end of year 3?
You deposit 20,000 today into a fund paying ?(1)=8%. From this fund, you receive 10 payments of R, with the payments made at the end of 2 years, 4 years, 6 years, …, 20 years. What is R?
if you had $ 100,000 hat was invested at 7% and you wanted o withdraw $10,000 at the end of each year, how long would your funds last? how long will they last if you earned 0% how long would they last if you earned the 7% but limited your withdrawals to $7,000 per year
A small company wishes to set up a fund that can be used for technology purchases over the next 6 years. Their forecast is for $9,000 to be needed at the end of year 1, increasing by 5% each year thereafter. The fund earns 10% per year. How much money must be deposited to the fund at the end of year 0 to just deplete the fund after the last withdrawal?
If you have $2,500 to invest and need to withdraw $4,430 at some time in the future, what is the minimum number of whole years to leave the money invested at 5 percent? years Round your answers to whole numbers. Tolerance is ±1.
Your RRSP savings of $35,000 are converted to a RRIF at 3.25% compounded monthly that pays $5,100 at the beginning of every month. After how many payments will the fund be depleted? 0 Round to the next payment

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