
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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For someone who has $100,000 to save for 20 years, would a 4% Certificate of Deposit that compounds annually be preferred to a 3.94% Certificate of Deposit that compounds monthly? Produce your calculations.
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- For someone who has $100,000 to save for 20 years, would a 4% Certificate of Deposit that compounds annually be a better deal than a 3.94% Certificate of Deposit that compounds quarterly? Why?arrow_forwardSuppose you want to buy a vacant lot for your future home for $29,673. If your bank is willing to loan you the money at a 6% APR over the next 14 years how much would be your monthly payment? (Round up your answer to two decimal point)arrow_forwardYour retirement account has a current balance of $3, 123. What interest rate would need to be earned in order to accumulate a total of $5,000,000 in 24 years by adding $3,123 annually? Is this possible? Why or why not?arrow_forward
- You need to have $34,500 in 14 years. You can earn an annual interest rate of 5 percent for the first 4 years, 5.6 percent for the next 3 years, and 6.3 percent for the final 7 years. How much do you have to deposit today? MUST USE EXCEL FORMULA, NOT ALGEBRAICALLY!arrow_forwardSuppose you want to have $300,000 for retirement in 20 years. Your account earns 10% interest. a) How much would you need to deposit in the account each month? S b) How much interest will you earn? Sarrow_forwardSuppose you deposit $1,093.00 into an account 4.00 years from today that earns 11.00% . It will be worth $1,622.00 years from today.arrow_forward
- You make $10,000 deposit 1 year from now, $15,000 deposit 3 years from now and $20,000 deposit 5 years from now in real dollars. You plan to retire 30 years from now. What monthly income you will receive due to these deposits, in real dollars, over five years after the retirement? The first payment would be received at the end of the first month after the retirement and the last payment on the month ending the fifth year. The nominal rate is 8.5% and the inflation expectations are 3.2%. Please use excelarrow_forwardAs part of your retirement plan, you have decided to deposit $9,000 at the beginning of each year into an account paying 3% interest compounded annually. (Round your answers to the nearest cent.) (a) How much (in $) would the account be worth after 10 years? $ (b) How much (in $) would the account be worth after 20 years? $ (c) When you retire in 30 years, what will be the total worth (in $) of the account? $ (d) If you found a bank that paid 6% interest compounded annually rather than 3%, how much (in $) would you have in the account after 30 years? $ (e) Use the future value of an annuity due formula to calculate how much (in $) you would have in the account after 30 years if the bank in part (d) switched from annual compounding to monthly compounding and you deposited $750 at the beginning of each month instead of $9,000 at the beginning of each year. $ Submit Ancworlarrow_forwardSuppose you want to save $1,000,000 for a retirement fund in 35 years. You anticipate making regular, end-of-month deposits in an annuity that pays 9% compounded monthly. How much should you deposit each month? Use this formula: How much of the $1,000,000 retirement fund comes from deposits and how much comes from interest?arrow_forward
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