Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Suppose that you will receive annual payments of $16,500 for a period of 10 years. The first payment will be made 6 years from now. If the interest rate is 7%, what is the
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- Can you show calculations for this? A five-year annuity of 10 $7,500 semiannual payments will begin 10 years from now, with the first payment coming 10.5 years from now. If the discount rate is 6 percent compounded monthly, what is the value of this annuity five years from now? What is the value three years from now? What is the current value of the annuity?arrow_forwardYou will receive $1000 two years from today, and at the end of each subsequent year, you will receive an additional $1000 compared to the previous year indefinitely. If the discount rate is 10% compounded annually, what is the present value today? Show the main steps in your calculation.arrow_forwardAn investment will pay you $10,000 in 10 years, and it also will pay you $400 at the end of each of the next 10 years (years 1 through 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your answer to nearest whole dollar.)arrow_forward
- You are paid £1,000 annually for 10 years, with the first payment due in one year and the last payment due in 10 years. What is the present value of all these payments using an interest rate of 4%?arrow_forwardWhat is the present worth of a uniform series of 10 payments that begin one year from now in the amount of $6000 if the interest rate is 10% per year?arrow_forwardSuppose you take out a 30 year mortgage for $ 200000 at 7.75% interest. The monthly payments on this loan are $ 1432.82. If you pay an extra 60% per month on your mortgage, how soon will you pay off the loan?New length in years = How much will you save in interest by making the extra payments?Saving =arrow_forward
- If you invest 1000.00 per year for 3 years starting 1 year from now and 1500.00 per year for 5years starting 4 years from now, how much will be the amount at the end of 8 years from now? Use a 12% interest rate per year.arrow_forwardWhat is the value of today of an investment that will pay $100 per year for 5 years. Assume first payment is made 1 year from today and the interest rate is 7%?arrow_forwardYou are offered an investment that requires you to put up $5,000 today in exchange for $12,000 10 years from now. What is the annual rate of return on this investment?arrow_forward
- Assuming an annual rate of return of 9.5% and depositing $3,000 at the end of every 6 months into your investment account, how much will you have after 30 years?arrow_forwardIn this problem: How much is the present value of monthly deposits of 500 in 8 years if the interest rate is 8% compounded monthly? What is the value of n that you will use in the formula?arrow_forwardSuppose you take out a 30-year mortgage for $ 225000 at 8.5% interest. The monthly payments on this loan are $ 1730.06. If you pay an extra 40% per month on your mortgage, how soon will you pay off the loan?New length in years = How much will you save in interest by making the extra payments?Saving = If you put $ 1730.06 per month into an annuity earning 10.25% interest compounded monthly for the remaining time on your original loan, how much money will you have at the end of the original 30 years?Extra savings =arrow_forward
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