Jim deposits $5,000 today into an account that pays 13% per year, and follows it up with three more deposits at the end of each of the next 3 years. Each subsequent deposit is $2,000 higher than the previous one. How much money will Jim have accumulated in his account by the end of 3 years?

Jim deposits $5,000 today into an account that pays 13% per year, and follows it up with three more deposits at the end of each of the next 3 years. Each subsequent deposit is $2,000 higher than the previous one. How much money will Jim have accumulated in his account by the end of 3 years?

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

See similar textbooks

Related questions

Q: avid deposits $2,000 per year at the end of the year for the next 20 years into an IRA account that…

A: The concept of time value of money will be used here. As per the concept of time value of money…

Q: Derek currently has S12, 511.00 in an account that pays 6.00%. He will withdraw S5, 050.00 every…

A: Future value (FV) is a financial concept that projects the anticipated value of an investment or…

Q: Wei Min opens a retirement account that pays 8%/year/month. For the next 30 years he deposits $300…

A: Given information regarding Wei Min's retirement account : Amount deposited : $300 per month Rate :…

Q: Mark deposits $50,000 now into an account which will eam interest at a rate of 7% per year, how much…

A: Present value = $50,000 Interest rate = 7% Number of years = 4

Q: Roger just deposited $12,000 into his account at Market Place Bank. The bank will pay 3.2 percent…

A: in this we have to find out simple interest and compounding interest and than find out interest on…

Q: Starting on the day he retires, Bob wants to receive payments of $10,000 at the beginning of each…

A: Present value of the amount is the worth of that amount in current times that is expected to be…

Q: Joe plans to deposit $300 at the end of each month into a bank account for a period of 3 yr, after…

A: To solve this question we have to first find the future value of monthly annuity of $ 300 after…

Q: Derek currently has $13,229.00 in an account that pays 6.00% He will withdraw $5,251.00 every other…

A: Savings account:A savings account is a financial tool offered by banks and credit unions that…

Q: how much will Lauren have in her account at the end of 6 years? (Assume she makes no withdrawals…

A: The future value (FV) is a financial concept that represents the worth or value of a sum of money at…

Q: Derek currently has $12,962.00 in an account that pays 5.00%. He will withdraw $5,837.00 every other…

A: Cash Flow at year 0=$12,962.00Cash Flow at for year 1,3,5,7,9,11,13,15= $5,837.00 Cash Flow at year…

Q: Derek will deposit $2,713.00 per year for 16.00 years into an account that earns 10.00 %, The first…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $150/month into…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: To secure the future of his son, a man plan to deposit P50,000 in a bank account every quarter for 5…

A: Effective interest rate There is different frequency of deposited amount and the compounding of…

Q: David wants to accumulate at least $40,000 by depositing $1,000 at the end of each month into a fund…

A: The concept of TVM states that the money received earlier can earn interest which makes it more…

Q: Jeremy is investing $5,000 today and will do so at the beginning of another nine years for a total…

A: The future value of the annuity due is the future worth of a cash flow series receivable/period at…

Q: Kolby has made deposits of $140.00 into his savings account at the end of every three months for 20…

A: Given that, Interest Rate per annum = 9% Number of years = 20 Number of Payments…

Q: years old now. He wants to accumulate $800,000.when he retires at age of 65. He starts depositing…

A: There is need of the planning for retirement and if we do on the time it will give good results and…

Q: Gwen decides to make regular deposits every month into an account that earns 8% annual interest,…

A: The question is based on concept of present value and future value of money . formula as: FV=pmt…

Q: Ron has made deposits of $80.00 into his savings account at the end of every three months for 10…

A: The compound interest is when the interest earned in a period is reinvested thereby earning more…

Q: Jake Werkheiser decides to invest $8000 in an IRA at the end of each year for the next 6 years. If…

A: The future value refers to the value of an investment or an amount of money at a specified point in…

Q: Jake plans to contribute $3600 at the end of each year to his IRA. If he earns a return of 8.5%…

A: Future Value Future value is the worth of any asset or any sum of money at a future date when such…

Q: David deposits RM60,000 today into his account that pays 8 percent per year. He continues deposit…

A: Deposit now = RM 60,000 Annual growth in deposit amount = 20% Period of deposit = 4 Years Number of…

Q: Derek currently has $13, 229.00 in an account that pays 6.00%. He will withdra 5, 251.00 every other…

A: Value of money changes with time and not same again.The concept of time value of money will be used…

Q: Edgar wants to have $600,000 in his retirement account in thirty years.if he begins with a single…

A: Paying someone or something, or being compensated, is an event or a procedure.

Q: Darien invests $10,000 in an account that pays 3.2% interest per year, compounded semi-annually.…

A: The amount of money can be calculated as future value of the principal amount.

Q: Derek will deposit $2,713.00 per year for 16.00 years into an account that earns 10.00 %, The first…

A: Annual deposit=PMT=2713NPER=n=16yearsRate=r=10%PV=today value=$14955How much at the end of 50 years.

Q: John invests $ 350 on the last day of each month into an account for 4 years compounding monthly at…

A: Monthly investment = $350Interest rate = 7.5%Total number of years = 7 yearsNumber of years of…

Q: Daniel owns a homestay that yields annual rent of RM30,000. There is a rent payment due today and…

A: The value of the amount after two years which is to be computed at given interest rates is termed as…

Q: Nick invested $2,000 in a bank savings account today and another $2000 a year from now. If the bank…

A: Future value is that amount which will be require to paid at some specified period of time. It…

Q: Peter deposits $75 at the end of each quarter for 15 years into an account that pays 3.14%…

A: Given data; payment amount= $75 number of years = 15 annual rate = 3.14% compounding frequency = 4…

Q: Peter makes a deposit at the end of every three months into a savings account that earns interest at…

A: Future value is the value of the future cash flows being compounded at a predefined rate of interest…

Q: Derek currently has $13,602.00 in an account that pays 5.00%. He will withdraw $5,708.0O every other…

A: The characteristics of withdrawal vary depending on the drug being stopped. Anxiety, fatigue,…

Q: Bozo the clown decides to start saving money. So, every month he deposits $200 into an account which…

A: The future value refers to the value of the annuity or the cash flow at the future date. The future…

Q: Derek will deposit $7,502.00 per year for 23.00 years into an account that earns 8.00%, The first…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: Jacob has 5000 dollars and wants to earn 6500 dollars from the bank. If the bank gives a compound…

A: It will take 6.69 years for Jacob to reach 6500 dollars

Q: JACK plans to retire after 20 years. Deposit account in a bank for this He thinks to open it. The…

A: Retirement Time (N) = 20 years Interest rate = 12% p.a. Deposits every quarter End of quarter…

Q: Jane deposits 10,000 USD and opens a deposit account at a bank. It will also deposit 6,000 USD one…

A: in this we have to use future value formula to calculate interest rate.

Q: Find the net exposure of the U.S. MNC with the following intra-affiliate transactions shown. -$20…

A: For calculating net exposure, we need to subtract one position within the hedge fund from another.…

Question

Jim deposits $5,000 today into an account that pays 13% per year, and follows it up
with three more deposits at the end of each of the next 3 years. Each subsequent
deposit is $2,000 higher than the previous one. How much money will Jim have
accumulated in his account by the end of 3 years?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define future value of money

VIEW

Step 2: Calculate the future value.

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

To secure the future of his son, a man plan to deposit P50,000 in a bank account every quarter for 5 years. The deposits will be made at the start of the periods. How much money can his son withdraw by the end of the 6th year if the money earns an interest of 12% compounded semi-annually? Draw the cfd.
Peter makes a deposit at the end of every month into a savings account that earns interest at 3.0% compounded semi-annually. He saves for 9 years, and then converts his savings into an annuity that pays him $2,000 at 3.9% compounded monthly at the end of every three months for 18 years. What size of the deposit Peter makes while he is saving?
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?
8) Bozo the clown decides to start saving money. So, every month he deposits $200 into an account which pays4% monthly. If Bozo’s first deposit is on May 1, 2021, then how much is in the account immediately after hisdeposit on November 1, 2027? 9) You deposit $200 each month for five years. How much will be in the account after the five years if theinterest rate is 4% monthly? 10) An Elk, age 3, is given $400,000. (If a mouse can buy refrigerator, then an Elk can have $400,000.) Theamount is invested at 5% annually. If the Elk (His name is Ernie. You met Ernie in problem 6.) takes the moneyin five equal annual payments with the first in eight years (when Ernie is 11), then what is the size of eachpayment? 11) Max the mouse decides that he needs a new place to put his giant cheese refrigerator. So, Max purchases a lotfor $300,000. Max agrees to pay $25,000 dollars at the end of each year. If the interest rate is 4% compoundedannually, how many full payments must be made, and what…
Derek currently has $11, 936.00 in an account that pays 5.00%. He will withdraw $5,341.00 every other year beginning next year until he has taken 4.00 withdrawals. He will deposit $11936.0 every other year beginning two years from today until he has made 4.0 deposits. How much will be in the account 27.00 years from today?
Ryan plans to deposit his annual bonus into a savings account that pays 3% interest compounded annually. The size of his bonus increases by $1000 each year, and the initial bonus amount he will deposit at the end of year 1 is $2500. A) Determine how much will be in the account after the 6th deposit? B) What’s the future value if he only plans to deposit his annual bonus for 8 years? C) What’s the future value if he only plans to deposit his annual bonus for 8 years, but also plans to skip the deposits at the end of years 3 and 6?
Steven just deposited $10,000 in a bank account that has a 12% interest rate. Steven also plans to contribute another $10,000 to the account one year from today and another $20,000 to the account two years from now. How much will be in the account three years from now?
Metehan Atay invests 550 pounds per week in the bank for an investment that will earn him 20% per year. If he continues to deposit money continuously for 8 years in this way, what will be the amount of his money at the end of the eighth year?
Shelly deposits the $2000 she got as a birthday gift from her grandmother into an account earning 3.6% interest compounded monthly. She decides to also deposit $200 at the end of each month into the same account. How much will be in the account in 10 years?
If Bob and Judy combine their savings of $1,500 and $900, respectively, and deposit this amount into an account that pays 7 % annual interest, compounded monthly, what will the account balance be after 7 years?
Paul opens a savings account today and deposits $1,000 now. He is certain that he will be able to deposit $1,000 per month in this account, starting in a month. If he does it for 12 consecutive months, given that this account pays interest of 0.5% a month, how much will he have at the end of the 12th month?
Bob wants to deposit $5000 into a bank account at the beginning of the next month and $200 per month into that same account at the end of that month and each subsequent month for the next 5 years. If the bank pays interest at the rate of 3% per year compounded monthly, how much will Bod have in his account at the end of 5 years? Assume that he makes no withdrawals during the 5 year period.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS