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 an insurance agent offers you a policy that will provide you with a yearly income of $60,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 6% compounded annually? (Round your answer to the nearest cent.)
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- You are offered an annuity that will pay $5,420 per quarter for 8 years (first payment made today). If you feel that the appropriate discount rate is 13%, what is the annuity worth to you today?arrow_forwardyou want to establish an annuity that will pay $7,500 for the next twenty years (end year) your financial institution will establish such an annuity if you deposit $104,000 today. what is the implied rate that the institution is paying on this annuity?arrow_forwardAn annuity saleman showed up at your door and gave you the following offer: His company is willing to give you $10 every week for one year if only you gave him $480 now. What is the annual rate of return that you would earn by accepting this offer?arrow_forward
- A shady individual has approached you for a loan. He promises to pay you $500at the end of five years. If your required rate of return is a stated annualrate of 20%, compounded monthly, how much would you be willing to lend to himtoday?arrow_forwardYour retirement policy lets you receive in 35 years equal annual payments of $10,000 for 10 years. The relevant interest rate is 6%. What is its PV? (Hint: this is a two step problem; find what the value of the retirement annuity will be 35 years from now and THEN find the present value of that sum in today’s dollars.arrow_forwardYou make $10,000 deposit 1 year from now, $15,000 deposit 3 years from now and $20,000 deposit 5 years from now in real dollars. You plan to retire 30 years from now. What monthly income you will receive due to these deposits, in real dollars, over five years after the retirement? The first payment would be received at the end of the first month after the retirement and the last payment on the month ending the fifth year. The nominal rate is 8.5% and the inflation expectations are 3.2%. Please use excelarrow_forward
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