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

A fund is built with annual payments increasing by $1 from $1 to $10 and then decreasing by $1 to $0. The first payment of $1 is made today. If the fund is used to purchase a ten-year level annuity with the first payment at twenty years from today, what is the amount of the level payment? (Assume an annual effective rate of interest of 4%.) Possible Answers A B D <$16 c≥ $17 but < $18 E ≥ $16 but < $17 ≥ $18 but < $19 ≥ $19
RATE OF RETURN. You have $5,000 excess cash to invest after you fully funded your emergency fund. You can choose to use the cash on a T-bill that can be purchased for $4,500 (maturing to value at $7,000 after one year) or you can buy two CDs for $2500 each (that can be purchased with a guaranteed 4.5% return after 12 months). Which will give a better return (in percentages)? Show work.
Comparing Annuities. Which of these 20-year 12% investment plans is best and why? Support answers with calculations. a) One payment of 4,000 now and let it grow for 20 years. b) 500 each year for 10 years and then let the accumulated amount grow for another 10 years. c) 500 each year for 20 years d) Do nothing for 10 years, and then contribute 2,000 each year for the next 10 years
Please answer fast i give you upvote.
You pay off a $200, 000 loan at effective annual interest rate 10% by making interest payments each year and paying off the principle in one lump sum at the end of 20 years. You make deposits into a sinking fund earning an effective annual interest rate of 12% at the end of each year in such a way that the total outlay is X for the first 10 years and X + 10, 000 for he next 10 years. Find X.
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
not use excel
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
Hansaben
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?

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