Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The current market value of a real estate lot in Quezon City is about ₱ 40,000 per square meter. Moreover, market prices are expected to increase by 6% every year. Meanwhile, a special deposit account is offering to pay an interest rate of 7% compounded quarterly. How much should you invest now in order to be able to buy a 400 square meter lot 10 years from now?
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- You want to vacation in Paris for the summer months in 7 years. You determine your expenses to be approximately 15,000 in today’s dollar worth. If the rate of inflation is running 3% a year, what should your goal be for the trip?arrow_forwardYou decided to deposit $300 each month starting next month for the next 10 years. If your account will grow to be $100,000 by year 10, what rate of return per month are you earning on your deposits?arrow_forwardYour home has a value today of $160,000. You expect prices to increase at 8% per year (compounded annually) for the next 4 years. After that, you expect prices to increase at 5% per year (compounded annually) for the next 6 years. What do you expect your home to be worth 10 years from now? Enter your answer as a positive number.arrow_forward
- How much should you invest each month in order to have $500,000 if your rate of return is 3.9% compounded monthly and you want to achieve your goal in 40 years? $ How much interest will you earn? $ How much should you invest each month in order to have $500,000 if you want to achieve your goal in 20 years? $ If you deposit the amount you need to achieve your goal in 20 years, how much will your savings be worth after 10 years?arrow_forwardThe stock market has an average annual return of 10% per year. We will consider the annual return to be an annual interest rate Suppose instead you want to put a 15% down payment on a $500,000 house in Texas. If you get a $6000 signing bonus from your first post-college job, how long would it take for you to pay for the down payment on this house using your signing bonus (assuming 10% annual interest compounded annually)?arrow_forwardIn some housing markets, it is predicted that homes will continue to appreciate at 4% per year into the future. If you purchase a home for $435,500.00, what can you expect to sell it for after 11 years, if this appreciation percentage is correct?arrow_forward
- A real estate property is on the market. You have estimated it will give you net cash flows of $5353 per month. You hope to sell it in 7 years for $334380. Your required return is 9.24%, how much should you be willing to pay for the property today? Answer:arrow_forwardHow much do you have to deposit today so that beginning 11 years from now you can withdraw $12,000 a year for the next 6 years (periods 11 through 16) plus an additional amount of $24,000 in the last year (period 16)? Assume an interest rate of 9 percent.arrow_forwardFuture value. Upstate University charges $16,000 a year in graduate tuition. Tuition rates are growing at 3.75% each year. You plan to enroll in graduate school in five years. What is your expected graduate tuition in five years? What is your expected graduate tuition in five years? (Round to the nearest cent)arrow_forward
- You are selling off some of your older business equipment and expect to receive $9,000. You plan on investing it at 5% interest rate, compounded monthly, for 2 years. What is the future value of the investment after 2 years?arrow_forwardAn investment promises to pay you $40, 000 per year starting five years from today and continuing until the end of year 12. How much would you pay for that investment today assuming a discount rate of 10% ?arrow_forwardYou have an investment account that started with $3,000 10 years ago and which now has grown to $8,000. a. What annual rate of return have you earned (you have made no additional contributions to the account)? b. If the savings bond earns 16% per year from now on, what will the account's value be 10 years from now?arrow_forward
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