Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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French Fried Food Inc. wishes to accumulate P500,000 during the next 24 months to open a second location. What constant amount should it pay at the end of each month into a money market savings account with an investment dealer, to attain its saving objectives? The planning assumption is that the account will earn 10% compounded semi-annually.
Find the present value of an annuity which pays P1,460 at the end of every 3 months of 6 years, if money is worth 9% compounded monthly?
If P2,000 is invested at the end of every year at 8% compounded semi-annually, what will be the total value of the periodic investment after 20 years?
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- Teal and Associates needs to borrow $35,000. The best loan they can find is one at 12% that must be repaid in monthly installments over the next years. How much are the monthly payments? (a) State the type. O present value future value O sinking fund O ordinary annuity O amortization (b) Answer the question. (Round your answer to the nearest cent.) $arrow_forwardThe Miller family wants to have $60,000 for future renovations for their home. They currently have $21,000 in cash. How long in years will it take the $21,0000 cash to grow to $60,000 if their savings 5% per annum, compounded quarterly?arrow_forwardA small business has determined that the machinery they currently use will wear out in 17 years. To replace the new machine when it wears out, the company wants to establish a savings account today. If the interest rate on the account is 1.1 percent per quarter and the cost of the machinery will be $255,000, how much will the company have to deposit today?arrow_forward
- An investment promises to pay you $40, 000 per year starting five years from today and continuing until the end of year 12. How much would you pay for that investment today assuming a discount rate of 10% ?arrow_forwardYou have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $3,000 payments and has an interest rate of 8 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 10 percent, also good for 6 years. How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present valuearrow_forwardTom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly, and have 30,000 at the end of ten years. How much would tom’s initial balance have to be? Savings lans are one of the common types of annuities. As stated earlier, an annuity is a series of equal payments amde at regular intervals. We will look at ordinary annuities in which payments are made at the end of each period. The futrue value of an ordianry annuity formula is A is the future value r is the annual interest rate n is the number of interest periods per year t is the number of years m is the regular paymentarrow_forward
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