Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The amount in a fund one and a half years from today is equal to 100. Find the present value of the fund using a nominal discount rate of 5% convertible semiannually.
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- A lump sum S deposited into either fund X or fund Y will be exactly sufficient to provide a perpetuity of $100 per year with the first payment due at the end of one year. Fund X will earn interest at an effective annual rate of 10% for the first 30 years and 6% thereafter. Fund Y will earn interest at a level effective annual rate of j. In which of the following ranges is j? someone help?arrow_forwardA fund of 25000 is to be accumulated by means of deposits of 1000 at the beginning of every year as long as necessary. If the fund earns an effective rate of interest of 8%, find how many regular deposits will be necessary and the size of a final deposit to be made on the last regular deposit.arrow_forwarddetermine the size of the payments that must be made to a sinking fund in order to accumulate $233,188 if the interest rate is 5.25% compounded quarterly and payments are made for 7 1/4 years. Use TVM solverarrow_forward
- Find the periodic payments PMT necessary to accomulate the given account in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $20,000 in a fund paying 2% per year, with quarterly payments for 20 years. PMT = $arrow_forwardUse the accompanying sinking fund formula to determine the payment needed to reach the accumulated amount. Semiannual payments with 7% interest are compounded semiannually for 7 years to accumulate $18,000arrow_forward5. A fund is built with annual payments increasing by $1 from $1 to $10 and then decreasing by $1 to $0. The first payment of $1 is made today. If the fund is used to purchase a ten-year level annuity with the first payment at twenty years from today, what is the amount of the level payment? (Assume an annual effective rate of interest of 4%.)arrow_forward
- An investor is setting up a fund which requires 10 years of contributions. The investor pays £250 per month for 10 years. All payments are made in arrears, i.e at the end of the period. The effective annual rate i = 1%. What is the value of the fund after 10 years? £ Enter an answer correct to 2 decimal places.arrow_forwardWhat is the equivalent average annual effective rate of interest over 5-year period if the fund earns d^{(4)} = 4% for the initial 1 year, d^{(12)} = 6% for the next 2 years, and i^{(6)} = 9% in the last 2 years?arrow_forwardUse the sinking fund formula to determine the payment needed to reach the accumulated amount. Round the answer to the nearest cent. Weekly payments with a 6.9% interest rate compounded weekly for 45 years to accumulate 400,000arrow_forward
- Find the amount of each payment to be made into a sinking fund which earns 7% compounded quarterly and produces $32,000 at the end of 2.5 years. Payments are made at the end of each period. The payment size is $ (Round to the nearest cent.)arrow_forwardFind the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $55,000 in a fund paying 2% per year, with quarterly payments for 20 yearsarrow_forwardIf $100 is deposited in a fund at the beginning of each 3 months for 8 years and the money is invested at 5% compounded quarterly, how much is the fund (a) at the end of 7 3/4 years just after the payment due then is made (b) at the end of 8 years?arrow_forward
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