Ekpreet places $8,000 into an investment today that earns 7.55% compounded quarterly and matures in 54 months. Akshay will wait until 18 months from today to make an investment that earns 7.60% compounded annually and maturing at the same time as Ekpreet's investment. How much will Akshay have to invest in order to have the same maturity value as Ekpreet? Value of Ekpreet's investment in 54 months = Akshay's investment 18 months from today =

Ekpreet places $8,000 into an investment today that earns 7.55% compounded quarterly and matures in 54 months. Akshay will wait until 18 months from today to make an investment that earns 7.60% compounded annually and maturing at the same time as Ekpreet's investment. How much will Akshay have to invest in order to have the same maturity value as Ekpreet? Value of Ekpreet's investment in 54 months = Akshay's investment 18 months from today =

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

You are expected to retire in 35 years from today. If you make an annual deposit of $20,500 at the end of each year into an investment account that pays 6.88% annually, how much money will your retirement account have at the end of 35 years if the interest in compounded.
Mark invests $75,000 annually for each of 5 years for a particular period. The rate of return is currently10%. Determine the value of Mark’s investment today.
Hilary just invested $2,000 in a security that will earn 6% interest each year. How much will she have at the end of 12 years?
Ten years ago, Hailey invested $2,000 and locked in a 9 percent annual interest rate for 30 years (ending 20 years from now). Aidan can make a 20-year investment today and lock in a 10 percent interest rate.How much money should he invest now in order to have the same amount of money in 20 years as Hailey?
What effective interest rate will Frankie have to earn if his investments of $2,000 at the end of every three months for 20 years are to have a maturity value in 20 years of $1,000,000?
Using the TVM calculator, compare the following if the investment pays 7%/a compound annually and payments are made until age 65. Calculate the future value of each investment and the total amount paid in. which would you choose? a) depositing $1500 every year starting at age 20. b) depositing $4500 every year starting at age 50.
Morgan invested 2800 for 6 years compounded semi-annually. If the future value of the investment was 4355.27, then what annual interest rate was he earning?
12. Marian Plunket owns her own business and is considering an investment. If she undertakes the investment it will pay $40,000 at the end of the next 3 years. The opportunity requires an initial investment of $10,000 plus an additional investment at the end of the second year of $50,000. What is the NPV of this opportunity if the interest rate is 10% per year? Should Marian take it?
Pueblo starts his account with the amount of $8,000. he add $100 each month. the account earns 7.1% interest, compounded monthly. The investment will last him for about 41 years. Pubelo thinks that beyond the $100 that he add each month, how much additional monthly payment will he need to add in order for the account to end with $770,000 after 41 years.
A 24-year-old December 2019 graduate has decided he wants the equivalent of $2,500,000 in January 1, 2020 buying power to be available exactly 40 years later on January 1, 2060. He plans to make his first investment of $Z on January 1, 2021 and every year thereafter, with the last payment of $Z on January 1, 2060. He can earn 8% on his money and expects inflation to run 5%. Solve, a. How many actual dollars will there be in his account immediately after his last deposit? b. What is $Z?
Fran Smith has two investment opportunities. The interest rate for both investments is 8%. Interest on the first investment will compound annually while interest on the second will compound quarterly. Which investment opportunity should Fran choose? Why?
Bill is considering investing $450 at the end of each month in a fixed incone instrument. He will receive $27,000 at the end of four years. If interest is compounded monthly, what is the effective annual rate of return on the investment. A. 22.3% B. 15.1 % C. 11.6 % D. 11.1 % E. 13.6 %

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