Calculating the Number of Periods Solve for the unknown number of years in each of the following: Present Value Years Interest Rate $ 610 940 26,350 43,500 7% 8 9 11 Future Value $ 1,389 1,821 289,715 430,258 Calculating Future Values You have just made your first $5,500 contribution to your individual retirement account. Assuming you earn an annual rate of return of 10 percent and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? (Does this suggest an investment strategy?)
Calculating the Number of Periods Solve for the unknown number of years in each of the following: Present Value Years Interest Rate $ 610 940 26,350 43,500 7% 8 9 11 Future Value $ 1,389 1,821 289,715 430,258 Calculating Future Values You have just made your first $5,500 contribution to your individual retirement account. Assuming you earn an annual rate of return of 10 percent and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? (Does this suggest an investment strategy?)
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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Transcribed Image Text:**LO4 5. Calculating the Number of Periods**
Solve for the unknown number of years in each of the following:
| Present Value | Years | Interest Rate | Future Value |
|---------------|-------|---------------|--------------|
| $610 | ? | 7% | $1,389 |
| $940 | 8 | ? | $1,821 |
| $26,350 | 9 | ? | $289,715 |
| $43,500 | 11 | ? | $430,258 |
**LO1 18. Calculating Future Values**
You have just made your first $5,500 contribution to your individual retirement account. Assuming you earn an annual rate of return of 10 percent and make no additional contributions, what will your account be worth when you retire in 45 years? What if you wait 10 years before contributing? (Does this suggest an investment strategy?)
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