Suppose a wealthy university booster has pledged a superstar high-school sophomore softball recruit $1,000 as a gift the day they give a verbal commitment to play softball at the booster's alma mater. Assuming a constant interest rate of 9%, consider the present and future values of this gift, depending on when the recruit announces their commitment. Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money. Date Received Today In 1 year In 2 years Present Value (Dollars) 1.000.00 Value in One Year (Dollars) 1,000.00 Value in Two Years (Dollars) 1.000.00 Now complete the first column of the previous table by computing the present value of the gift if the recruit commits in one year or two years. The present value of the gift is if the recruit commits in two years than it is if you get engaged in one year

Suppose a wealthy university booster has pledged a superstar high-school sophomore softball recruit $1,000 as a gift the day they give a verbal commitment to play softball at the booster's alma mater. Assuming a constant interest rate of 9%, consider the present and future values of this gift, depending on when the recruit announces their commitment. Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money. Date Received Today In 1 year In 2 years Present Value (Dollars) 1.000.00 Value in One Year (Dollars) 1,000.00 Value in Two Years (Dollars) 1.000.00 Now complete the first column of the previous table by computing the present value of the gift if the recruit commits in one year or two years. The present value of the gift is if the recruit commits in two years than it is if you get engaged in one year

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

Similar questions

Atita plans to gift $150,000 to her daughters as a gift in the future. She thinks it will help her daughter fulfil her dreams when she reaches her age to marry. Assume her daughter is 3 years old and may get married in her 20s. Assume that Atita has $30,000 and wishes to invest that in a financial asset with a 9% rate of return per annum. Required: How would you define the amount of $30 000 and $150 000 in terms of the time value of money? ANSWER a (i): (answer box will enlarge as you enter your response) How long will she have to wait until she reaches the goal of $150 000? ANSWER a (ii): Mark will receive $13,500 from his parent at the end of each year for five years. He plans to invest them in a financial asset with an interest rate of 7.5%. How much money…
Ann and Tom want to establish a fund for their grandson's college education. What lump sum must they deposit at a 10% annual interest rate, compounded quarterly, in order to have $30,000 in the fund at the end of 10 years? Question content area bottom Part 1 They should deposit $enter your response here. (Round up to the nearest cent.)
Need assistance with this please provide the best answer
← A newborn child receives a $8,000 gift toward a college education from her grandparents. How much will the $8,000 be worth in 19 years if it is invested at 5.9% compounded quarterly? It will be worth $ (Round to the nearest cent.)
A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $38,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 5 percent, how much must the donor contribute today to fully fund the scholarship?
Please show financial calculator inputs for this problem.…Your sister would like your help planning for her new daughter’s college education. She has estimated that the cost of 1 year of college (tuition, room, and board) is currently $60,000 a year. The cost of college is estimated to increase at an annual rate of 5%. She would like you to figure out how much she would need to deposit at the end of each month for the next 18 years to cover her daughter’s four years of tuition assuming her deposits will earn 12% each year (1 % a month) (Note your account will earn interest a 1% a month even if you are not making monthly payments after you stop paying in at the end of the 18th year.
2. math of interest. please solve correctly
Ethan is creating a college investment fund for his daughter. He will put in $21,000 per year for the next 17 years and expects to earn a 12% annual rate of return. How much money will his daughter have when she starts college? Use Appendix C to calculate the answer. Multiple Choice $1,014, 538 $1,015,551 $1,027,291 $1,026,564
4. Mr. Richman has offered to give the New Life Hospice Center $100,000 today or $300,000 when he dies. If the hospice center earns 14% on its investments, and it expects Mr. Richman to live for 12 years, which alternative should they take? Take the gift now or later? Discuss in narrative and include your calculations and citations with your answer.
Use a financial calculator or computer software program to answer the following questions: a) Melanie is trying to save money for retirement and has a future goal of $750,000 at the end of 20 years. Determine the present value of her goal using a discount rate of 12%. b) How would the present value change if the $750,000 is to be received at the end of 15 years instead? Explain the impact and show your work?
George has planned ahead and identified his dream house purchase in 3 years’ time. The current value of the house is $580 000. It is expected that the house will increase in value at a rate of 4.5% p.a. 3, Does the amount saved in part (ii) meet the 10% requirement from the bank as a deposit at the end of year 3?Show formula, variables, calculations and a concluding statement in your response.
Scarlett has $22,500 available today to invest for 20 years. Scarlett desires an investment fund balance of $100,000 at that time. What interest rate (compounded annually) must Scarlett earn to reach the desired balance in 20 years? Enter the percent rounded to two digits after the decimal; enter 2.04 for 2.044% or 2.05 for 2.045%. Answer %

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