Mr. James would like an income of $300,000 per year in equal instalments for fifteen (15) years. How much should he invest in order to obtain this income if the interest rate is 20% compounded annually?
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Mr. James would like an income of $300,000 per year in equal instalments for fifteen (15) years. How much should he invest in order to obtain this income if the interest rate is 20% compounded annually?
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- A man wishes his son to receive $250,000 ten years from now. What amount should he invest if it will earn an interest of 10% compounded annually during the first 5 years and 12% compounded quarterly during the next five years?Ken Francis is offered the possibility of investing $2,745 today; in return, he would receive $10,000 after 15 years. What is the annual rate of interest for this investment?Lee wants to receive $18,000 each year for the next 20 years. Assume a 4% rate compounded annually. How much must Lee invest today?
- Bill Padley expects to invest $10,000 for 25 years, after which he wants to receive $108,347. What rate of interest must Padley earn?Please answer Logan is going to invest $61,000 and leave it in an account for 20 years. Assuming the interest is compounded continuously, what interest rate, to the nearest hundredth of a percent, would be required in order for Logan to end up with $103,000 ?Sardor has been offered an investment that will pay him $500 three years from today. If his opportunity cost is 7% compounded annually, what value should he place on this opportunity today?
- Ms. Maya Manaco has P2,500,000 to invest for a year. She can lend it to his brother who has agreed to pay 10% simple interest for the year, or she can invest it with a bank at 8% compounded quarterly for a year. Which of the alternatives will yield a higher interest? By how much? **A man wishes his son to receive P500,000.00 ten years from now. What amount should he invest now if it will earn interest of 12% compounded annually during the period?Bill Baxter has $25,000 to invest for a year. He can lend it to his sister, who has agreed to pay 10% simple interest for the year. Or, he can invest it in a retirement plan expected to pay 6% compounded quarterly for a year. How much additional interest would the simple interest loan to his sister generate?
- The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have at retirement if they can earn a 4% rate of interest on their investment?Jenny Lopez estimates that as a result of completing her master’s degree, she will earn an additional $6,000 a year for the next 40 years. What would be the future value of these additional earnings based on an annual interest rate of 6 percent?You are willing to pay $31,250 now to purchase a perpetuity that will pay you and your heirs $2,500 each year, forever, starting at the end of this year. If your required rate of return does not change, how much would you be willing to pay if this were a 40-year, annual payment, ordinary annuity instead of perpetuity?