Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are scheduled to receive $5,000 in two years. When you receive it, you will invest it at 6.5 percent per year. How much will your investment be worth eight years from now?
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- Thomas Taylor plans to invest $24,300 a year at the end of each year for the next seven years in an investment that will pay him a rate of return of 9.1 percent. How much money will Thomas have at the end of seven years? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.) Future value of investment $arrow_forwardMitchell Investments has offered you the following investment opportunity: $7,000 at the end of each year for the first 7 years, plus $6,000 at the end of each year from years 8 through 14, plus $3,000 at the end of each year from years 15 through 21. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest dollar. How much would you be willing to pay for this investment if you required a 8 percent rate of return?$ If the payments were received at the beginning of each year, what would you be willing to pay for this investment?$arrow_forwardAn example of how to calculate net present value is done using the following. Imagine you have been given an investment opportunity wherein if you invest $1,200 today, you will receive $650 dollars at the end of each year for the next 5 years. You could separately choose to invest your money at 10% interest each year. Should you take the investment opportunity? To find the answer, use the NPV formula:arrow_forward
- An investment will pay you $10,000 in 10 years, and it also will pay you $400 at the end of each of the next 10 years (years 1 through 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your answer to nearest whole dollar.)arrow_forwardYou purchase an investment for $1,000. You expect it will increase in value at a rate of 9% per year. If your expectations are correct, how much will your investment be worth at the end of 12 years? Your Answer:arrow_forwardYou expect to receive $12,000 at graduation in two years. You plan on investing it at 10 percent until you have $109,000. How long will you wait from now?arrow_forward
- You have $17,500 you want to invest for the next 40 years. You are offered an investment plan that will pay you 6 percent per year for the next 20 years and 10 percent per year for the last 20 years. a. How much will you have at the end of the 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the investment plan pays you 10 percent per year for the first 20 years and 6 percent per year for the next 20 years, how much will you have at the end of the 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardYou are considering an investment that will pay you $1,200 per month for three years. The first payment occurs one month from today. What is the present value of this investment if the annual percentage rate is 12 percent?arrow_forwardA person who invests $1,000 each year finds one choice that is expected to pay 4 percent per year and another choice that may pay 7 percent. What is the difference in return if the investment is made for four years?arrow_forward
- man.1 You expect to receive $5,000 at Graduation one year from now. Your plan is to invest this money at 6.5 percent, compounded annually, until you have 50,000. At that time, you plan to travel around the world. How long from now will it be until you can begin your travels?arrow_forwardYou expect to receive $150,000 per year on a contract that will last 5 years. You are trying to compare this offer to a lump sum payment. If you can earn 5% on your investments, how much is the contract worth to you today?arrow_forwardYou are offered an investment that requires you to put up $5,000 today in exchange for $12,000 10 years from now. What is the annual rate of return on this investment?arrow_forward
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