None Problem 1Time value You have $1,500 to invest today at 8% interest compounded annually.a. Find how much you will have accumulated in the account after (1) 3 years,(2) 6 years, and (3) 10 years.b. Use your findings in part a to calculate the amount of interest earned in (1)the first 3 years (years 1 to 3), (2) the second 3 years (years 4 to 6), and(3) the third 3 years (years 7 to 9).c. Compare and contrast your findings in part b. Explain why the amount ofinterest earned increases in each succeeding 3-year period.

c) Comparing and contrasting the findings in part b.The amount of interest earned increases in each…

Answered: Problem 1 Time value You have $1,500 to…

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

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Previous Problem Problem List Next Problem Suppose you invest $11,695.00 into an account earning an interest rate of 2.767% compounded continuously for 1 year(s) and thereafter earning an interest rate of 3.227% compounded weekly. How much money is in the account after 11 years? The amount in the account is $ Preview My Answers Submit Answers You have attempted this problem 0 times
Question content area top Part 1 (Comprehensive problem) You would like to have $57,000 in 14 years. To accumulate this amount, you plan to deposit an equal sum in the bank each year that will earn 6 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 6 percent on this deposit.) c. At the end of five years, you will receive $15,000 and deposit this in the bank toward your goal of $57,000 at the end of year 14. In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Again, assume you can earn 6 percent on your deposits.) Question content area bottom Part 1 a. How much must you deposit annually to accumulate this amount?…
Question content area top Part 1 (Comprehensive problem) You would like to have $ 60,000 in 14 years. To accumulate this amount, you plan to deposit an equal sum in the bank each year that will earn 6 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 6 percent on this deposit.) c. At the end of five years, you will receive $ 10,000 and deposit this in the bank toward your goal of $ 60,000 at the end of year 14. In addition to the lump-sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Again, assume you can earn 6 percent on your deposits.) Question content area bottom Part 1 a. How much must you deposit annually to…
Question content area Part 1 You deposit $1500 in an account with 3% annual compound interest. Complete the following, assuming you make no additional deposits or withdrawals. In how many years will the account be growing by $190 per year? It will be growing by $190 per year in approximately enter your response here years. (Round to nearest tenth of a year.)
Question 1: Calculate the present value of $5,000 received 5 years from today if your investments pay: a. 6% compounded annually b. 8% compounded annually C. 10% compounded annually d. 10% compounded semi-annually What do your answers to these questions tell you about the relation between sent values and interest rates and between present values and the number of compounding periods per year? Question 2: Suppose that you grow money in an account for four years at a return rate of 10%. Then this future amount is later invested for another four years. If your money triples by the end of the eight years total, then (to one decimal) what rate of return did you earn over the latter four years? 100 FV4 0 + 4 240 Question 3: A contract features a future flow of $46,000 three years from today. If you can now purchase that flow for $42,201.84, then what annual implied return would you earn on this contract? ㅏ 0 Question 4: What is the present value of the following uneven stream? FV8=300 795 1…
Exercise 4. Simple Interest. Calculate the amount of money you will have in the following account after 5 years, assuming that you earn simple interest You deposit $700 in an account with an annual interest rate of 4% Exercise 5. Compound Interest. Use the compound interest formula to compute the balance in the following accounts after the sd period of time, assuming interest is compounded annually: $10.000 is invested at an APR of 4% for 10 years. Ộ1 = P x (1+ APR %3D
Problem 2 Find the interest rate of $8, 000 accumulating to $11, 672.12 compounded quar-terly for 8 years. Please give solution
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Question 1 What is the future value of $650 deposited for one year earning an 10 percent interest rate annually? (Do not round intermediate calculations. Enter your answer as a whole number.) Future value

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