At the birth of a child, what sum should his father invest in order to provide the child with Php 3 500 000 at age 21 if the money earns 20 % compounded quarterly a. Php 51 228.16 b. Php 61 258.32 c. Php 58 098.76 d. Php 47,658.12

At the birth of a child, what sum should his father invest in order to provide the child with Php 3 500 000 at age 21 if the money earns 20 % compounded quarterly a. Php 51 228.16 b. Php 61 258.32 c. Php 58 098.76 d. Php 47,658.12

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

See similar textbooks

Related questions

Q: A father wants to set up a bank account that will pay his daughter $18,000 at the end-of-quarter…

A: It is assumed that the interest rate per quarter is 2%.

Q: 4.You expect to need $22,500 in 4 years to finance the wedding of your daughter. How much should you…

A: Deposited amount refers to the present value of an asset that will be present at some future date…

Q: A father plans to set aside Php250,000 for his son's college education. If he wishes to have…

A: In the case above a father plans to set php250,000 and wants to earn php500,000

Q: Mrs. Euclid wants to have Php246,916.30, within 3 years for her daughter's graduation. How much…

A: Answer - The future value annuity formula calculates the value at the end of given period n of a…

Q: You deposit a lump sum P in a trust fund on the day your grandchild is born. The fund earns 7.25%…

A: Present Value(PV) is current value of amount which is paid or received in future. PV is calculated…

Q: By the condition of a will, the sum og P25,000 is left to a girl to be held in trust by her guardian…

A: The time value rule states that a sum of money available in present is worth more than the same…

Q: Tariq will invest OMR 3000 in an investment fund for the next 30 years starting at the end of this…

A: The future value of the annuity is the total value of all the payments which occur regularly at a…

Q: Lily Bobtail wishes to leave a provision in her will that $2 000 will be paid annually in perpetuity…

A: Total value required towards charity is calculated by present value of perpetuity formula. Present…

Q: John Rider wants to accumulate $40,000 to be used for his daughter’s college education. He would…

A: Present Value Factor(PVF)=11+rateterm Future Value Annuity(FVA)=(1+rate)term-1rate Future Value…

Q: Razi need RM20,000 for his daughter education in 9 years, how many he deposits in his bank at the…

A: Monthly payments refers to the amount which is paid on periodic basis. The period of monthly…

Q: Nancy Jackson just learned that she received an inheritance from her grandmother. The inheritance…

A: The question is related to Time Value of Money. The value of inheritance would be calculated using…

Q: A father wishes to provide P4,000 for his son on his 21st birthday. How much should he deposit every…

A: Future Value of Annuity The future value of annuity refers to the total value of the investment at…

Q: how much must your grandparents deposit today?

A: Perpetuity refers to an annuity that has no definite period and goes on for infinity. The annuity…

Q: You need Php 40,000 per year for four years to go to college. Your father invested Php 50,000 in a…

Q: By the condition of a will, the sum of P 20,000 is left to a girl to be held in trust fund by her…

A: Time will tell worth of cash changes as it complete long duration of Investement. it will tell value…

Q: Mr. Bienvenido Bautista needs a fund of Php1,000,000 to renovate his house. To provide for this, he…

A: It can be calculated using =NPER(rate,pmt,pv,[fv],[type]) Rate The interest rate for the loan. Nper…

Q: John Rider wants to accumulate $100,000 to be used for his daughter’s college education. He would…

A: The accumulated value will depend on rate at which the investment is made and the period of total…

Q: Mr. Bienvenido Bautista needs a fund of Php1,000,000 to renovate his house. To provide for this, he…

A: Future value required (FV) = Php1,000,000 Interest rate = 12% Monthly interest rate (r) = 12%/12 =…

Q: a person needs RS.70000 after 19 years his daughter marriage ,how much he needs to invest to have…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: 2. By the conditions of a will, the sum of P25000 is left to a girl to be held in trust by her…

A: A cash flow statement is a financial statement that summarize all cash inflows a company receives…

Q: Assume the total cost of a college education in Singapore will be SGD 250,000 when your child enters…

A: Annual rate of interest is the rate at which the interest amount is provided on the principal amount…

Q: Tariq will invest OMR 3000 in an investment fund for the next 30 years starting at the end of this…

A: Annual Investment at the end of each year =OMR 3000 Interest Rate(r) = 13% Years(n) = 30 Future…

Q: 0,000 now for the college education of his 2 year old son. If the fund earns 14% effective, how much…

A: The given problem can be solved using PMT and FV function in excel. FV function computes amount…

Q: Your parents have promised to give you Php25,000 on your wedding day if you wait 10 years to get…

A: The time value of money concept is the financial concept that is used in finance to estimate and…

Q: You would like to give your daughter $75,000 towards her college education 16 years from now. How…

A: The amount to be set aside today is calculated as the present value using following equation Present…

Q: How much money should a grandparent deposit in a college savings fund today for their newborn…

A: Future value refers to the value that an amount would assume at a future time period after…

Q: A father decides to invest k300 each month at 12% per year compounded monthly to pay for his 12 year…

A: Data given: pmt= k 300 r=12% (compounded monthly) n=17-12 =5 years

Q: Parents wish to have 140,000 available for a child’s education. If the child is now 5 years old, how…

A: The concept of time value of money will be applied here. We have to find the amount deposited today…

Q: On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded…

A: The investment return rate that is used to calculate present value is called the discount rate. In…

Q: Q2. Carlos and Martha wanted to ensure that they had $100,000 for their child's future plans. As…

A: Effective annual rate: Because compounding effects are taken into account, the effective annual…

Q: Your grandparents would like to establish a trust fund that will pay you and your heirs $185,000 per…

A: Annual payment = $185,000 Annual return = 3.6%

Q: Parents wish to have 90,000 available for a child’s education.if the child is now 4 years old, how…

A: Given, Future Value (FV) =90000 Rate=5% Semiannually (r)=5%2=0.025 Total no. of years = (18-4)=14…

Q: How much will the son get each year starting from his 18th to 22nd birthday?

A: Future value: It represents the future worth of the present annuity stream or present amount. Future…

Q: Q4. Thomas deposited 300,000Php now, so that his 3 year old daughter will receive 6 equal amounts of…

A: Present Value of Annuity Due refers to a concept that determines the value of cash flows at present…

Question

At the birth of a child, what sum should his father invest in order to provide the child with Php 3 500 000 at age 21 if the money earns 20 % compounded quarterly

a. Php 51 228.16

b. Php 61 258.32

c. Php 58 098.76

d. Php 47,658.12

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Solve the given
sonia which to establish a trust fund from which her son can withdrew $6000 every six months for 15 years , when he reach 16 years old.At the end of which time he will receive the remaining money in the trust,which you would like to be $25000. The trust will be invested at 6% per annum compounded semi-annual .How large should the trust be ?
6. By the conditions of a will, the sum of P25,000 is left to a girl to be held in trust by her guardian until it amounts to P45,000. When will the girl receive the money if the fund is invested at 8% compounded quarterly? Ans, 7.42 years 7. At a certain interest rate compounded semiannually, P5,000 will amount to P20.000 after 10 years. What is the amount at the end of 15 years? Ans. P40.029.72
21) An 8-year-old child wins $1 000 000 from a lottery. The law requires that this money be set aside in a trust fund until the child reaches 18. The child’s parents decide that the money should be paid out in 20 equal annual payments with the first payment at age 18. Calculate these payments if the trust fund pays interest at ji = 5%.
6. When Alice and Mark's first child was one month old, and at the end of every month thereafter, they invested S80 in a Registered Education Savings Plan (RESP) that paid 6% per year, compounded monthly. Determine the amount in the RESP on the child's 18th birthday. a. $23 114.70 b. $19 177.92 c. $30 988.26 d. $27 051.48
By the condition of the will, the sum of P20,000 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000. When will the girl receive the money if the fund was invested at 8% compounded quarterly?
John Rider wants to accumulate $90,000 to be used for his daughter's college education. He would like to have the amount available on December 31, 2026. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1. PV of $1. EVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were to deposit a single amount, how much would he have to invest on December 31, 2021? 2. IH John were to make five equal deposits on each December 31, beginning a year later, on December 31, 2022, what is the required amount of each deposit? 3. If John were to make five equal deposits on each December 31, beginning now, on December 31, 2021, what is the required amount of each deposit? (For all requirements, Round your final answers to nearest whole dollar amount.) 1. Amount Annuity amount Annuity amount 2.
4-30 A A man wants to help provide a college education for his young daughter. He can afford to invest $1500/yr for the next 5 years, beginning on the girl's 5th birthday. He wishes to give his daughter $10,000 on her 18th, 19th, 20th, and 21st birthdays, for a total of $40,000. Assuming 6% interest, what uniform annual investment will he have to make on the girl's 9th through 17th birthdays?
Kk.193. Miguel wanted to ensure that she had $75,000 for her child's university education. As soon as her child was born, she started saving $1,200 every 6 months in an investment fund. If she achieved her investment target on her child's 19th birthday, and she made no deposit on the child's 19th birthday, calculate the following: a. The nominal interest rate for the investment, compounded quarterly. % Round to two decimal places. b. Calculate the effective interest rate for this investment. % Round to two decimal places.
4. Samuel opened an account in a bank with a deposit of RM3,000 during his daughter is 3 years old birthday. He aims to give her as a birthday present when she is 18 years old. If the bank pays 4.8% compounded every six months, calculate the total amount received by her daughter and the interest earned on her 18 years old birthday. No use excel.

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS