Crystal's investment manager offers him an interest rate of 7.0% compounded on his investments. If the manager changes his mind and offers him a rate of 7.0% compounded annually how much more would he have to deposit at the end of each year in order to accumulate $419,000 in 30 years? Round to the nearest cent

Crystal's investment manager offers him an interest rate of 7.0% compounded on his investments. If the manager changes his mind and offers him a rate of 7.0% compounded annually how much more would he have to deposit at the end of each year in order to accumulate $419,000 in 30 years? Round to the nearest cent

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

See similar textbooks

Similar questions

Adrian's investment manager offers her an interest rate of 7.0% compounded monthly on her investments. If the manager changes his mind and offers her a rate of 7.0% compounded annually how much more would she have to deposit at the end of each year in order to accumulate $424,000 in 25 years? Round to the nearest cent
An investor deposits $100 into his credit union account that pays interest at the rate of 3.25% per year (payable at the end of each year). He leaves the money and all accrued interest in the account for 7 years. How much will he have at the end of the 7 years? What is the future value in SEVEN years if you receive $300 in two years and $500 at the end of five years? Assume an annual compound rate of 8.5%. What is the value of $2000after one year, if bank compounding half yearly and offered rate is 10%? What is the value of $2000 after one year if bank compounding quarterly and offered rate is 10%? What is the value of $2000after one year if bank compounding monthly and offered rate is 10%?
Your friend offers to pay you an annuity of $2,800 at the end of each year for 3 years in return for cash today. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
Harry Taylor plans to pay an ordinary annuity of $6,000 annually for ten years so he can take a year's sabbatical to study for a master's degree in business. The annual rate of interest is 2.9%. How much will Harry have at the end of three years? How much interest will he earn on the investment after three years? At the end of three years Harry will have $ (Round to the nearest cent as needed.) He will earn S interest on the investment after three years. (Round to the nearest cent as needed.)
Dean Gooch is planning for his retirement, so he is setting up a payout annuity with his bank. He wishes to receive a payout of $1,500 per month for twenty-five years. (a) How much money must he deposit if his money earns 7.3% interest compounded monthly? (Round your answer to the nearest cent.) (b) Find the total amount that Dean will receive from his payout annuity.
Harry Taylor plans to pay an ordinary annuity of $4,900 annually for ten years so he can take a year's sabbatical to study for a master's degree in business. The annual rate of interest is 3.5%. How much will Harry have at the end of three years? How much interest will he earn on the investment after three years?
A company offers you employment for the next 30 years until retirement but will not pay you a pension when you do retire, so you start investing now for your retirement. You know you can earn 5% compounded monthly on an available investment for the next 30 years until you retire. During retirement you will earn 6% compounded annually on any funds remaining in the investment, and you expect to withdraw $110.000 at the end of each year of your retirement. If you anticipate living 20 years in retirement, how much of your salary as a minimum would you have to invest at the end of each year until retirement?
Ms. Maya Manaco has P2,500,000 to invest for a year. She can lend it to his brother who has agreed to pay 10% simple interest for the year, or she can invest it with a bank at 8% compounded quarterly for a year. Which of the alternatives will yield a higher interest? By how much? **
Suppose that Jacob would like to invest at the end of each month for the next 15 years into an account paying 6.72% compounded monthly in order to accumulate $10,000 at the end of that time? How much money must Jacob deposit into the account each month? How much interest will he have earned?
Assume that you will borrow $400, 000 from a bank that charges 4.5 percent interest compounded monthly and repay the loan with monthly equal payments at the end of each month over the next 15 years. How much will be the monthly payments? If you are given a choice of investing at 7.65 percent compounded annually or 7.50 percent compounded monthly, which would you prefer? Why? How much must Jane invest today at 3.5 percent interest compounded quarterly to have $20, 400 in 6 years? What annual rate of return must Sam earn on your $150,000 to have $320, 000 in 10 years? If the discount rate is 4.5 percent, what is the present value of a perpetual cash flow on $1.150 per year? Mike will invest $1,500 at the end of each month for 8 years. If he can earn 6 percent compounded monthly, how much will he have in 8 years? Lisa is trying to decide how much she should pay for an investment that generates the following stream of future cash flows: Year Cash flow ($ ) 1 45,000 2 15,000 350,000 4…
An investor deposits a sum of Rs 100,000 in an investment company with a promise of a rate of return of 18 percent per year. if the investor decides to withdraw the accumulated interest at the end of each year, what would be his yearly earnings from the investment if added (i) monthly, and (ii) continuously?
Karen wants to have $22,559 in her investment account in 5 years. If her bank offers an annual compound interest rate of 1.2% with monthly compounding, how much should she deposit today? Round your answer to the nearest dollar.