or Formula Approach) You want to begin saving for your daughters college education and you estimate that she will need $150,000 in 17 years. If you feel co
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(Use Calculator or Formula Approach)
You want to begin saving for your daughters college education and you estimate that she will need $150,000 in 17 years. If you feel confident that you can earn 8% per year, how much do you need to invest today?
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- You calculate that you will need $75,000 in ten years to be able to pay for your daughter's college education. If you invest $20,000 today, what rate of return will you need to achieve this goal? Select one: A. Between 12% and 13% B. Between 13% and 14% C. Between 14% and 15% D. Between 15% and 16%You want to begin saving for your daughter’s college education and you estimate that she will need R240 000 in 17 years. If you feel confident that you can earn 7.5% per year, how much do you need to invest today?SOLVE the following:i. Suppose that your five-year old daughter has just announced her desire toattend college. After some research, you determined that you will need aboutRM 100,000 on her 18th birthday to pay for four years of college. If you canearn 8% annually on your investments, how much do you need to invest todayto achieve your goal?ii. Suppose you have an extra RM100 today that you wish to invest in for oneyear. If you can earn 10% per annum on your investment, how much will youhave in one year?
- 6) Your daughter is born today, and you want her to be a millionaire by the time she is 35 years old. You open an investment account that promises to pay 16% per year. How much money must you deposit each year, starting on her 1st birthday and ending on her 35th birthday, so your daughter will have $1,000,000 by her 35th birthday? N Year I/Y Cash flow 7) The present value of the following cash flow stream is $8,500 discounted at 10 percent annually. What is the value of the missing cash flow? 1,000 PV 1 ? PMT 2 2,000 FV 3 4,000 4Assume that your parents wanted to have $70,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 8.5% per year on their investments. a. How much would they have to save each year to reach their goal? b. If they think you will take five years instead of four to graduate and decide to have $110,000 saved just in case, how much would they have to save each year to reach their new goal? a. How much would they have to save each year to reach their goal? To reach the goal of $70,000, the amount they have to save each year is (Round to the nearest cent.)7) You are expecting twins and want to have $500,000 by the time your two kids go to college. You believe you can earn a return of 7%/year. You have nothing saved up. But you can contribute $8,000 each year going forward. How many years will it take you to grow your money to $500,000?
- You are thinking of building a new machine that will save you $3,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 2% per year forever. What is the present value of the savings if the interest rate is 9% per year? The present value of the savings is $ (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. All parts showing Clear All Check Answer MacBook AirAssume that your parents wanted to have $160,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and eamed 12.5% per year on their investments. a. How much would they have to save each year to reach their goal? b. If they think you will take five years instead of four to graduate and decide to have $200,000 saved just in case, how much would they have to save each year to reach their new goal? Ⓒ a. How much would they have to save each year to reach their goal? To reach the goal of $160,000, the amount they have to save each year is $ (Round to the nearest cent.)You are trying to decide how much to save for retirement. Assume you plan to save $6,000 per year with the first investment made one year from now. You think you can earn 6% per year on your investments and you plan to retire in 43 years, immediately after making your last $6,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $6,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 18 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 18th withdrawal (assume your savings will continue to earn 6% in retirement)? d. If, instead, you decide to withdraw $100,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take…
- 6. Calculating Rates of Return Assume the total cost of a college education will be $235,000 when your child enters college in 18 years. You presently have $53,000 to invest. What annual rate of interest must you earn on your 03 investment to cover the cost of your child's college education?You are just starting your first job out of college. You and your best friend are competing to see who will have more in their savings when you retire; you both plan to retire at age 52, just 30 years out. You will need $5 million to retire. If you average an annual return of 7% on your investment, how much do you need to put into retirement savings on an annual basis?Saleh is considering an investment that will pay $5,000 a year for 7 years, starting one year from today. How much should she pay for this investment if she wishes to earn a 12 percent rate of return? a. $17,899.08 b. $18,023.88 c.. $20,186.75 d. $22,818.78