When Joe graduated from college at age 22, his grandparents established a trust fund and endowed it with $10,000. The gift is intended to serve as a retirement fund for Joe, and he will be able to draw on it when he turns 62. If the fund earns a nine percent return over that period, what will it be worth when Joe reaches age 62? [submit your answer with a comma but no dollar signs]

When Joe graduated from college at age 22, his grandparents established a trust fund and endowed it with $10,000. The gift is intended to serve as a retirement fund for Joe, and he will be able to draw on it when he turns 62. If the fund earns a nine percent return over that period, what will it be worth when Joe reaches age 62? [submit your answer with a comma but no dollar signs]

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

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When Aroon was a small child, his grandfather established a trust fund for him to receive $20,000 on his 35th birthday. Aroon just turned 23. What is the value of his trust today if the trust fund earns 5 percent interest? If he had to wait until age 40 to receive the money, what is the present value today of the $20,000 to be received in 17 years? Click the following table icon to view the PVIF table: The present value, PV, of his trust today if the trust fund earns 5 percent interest is $ A LO a 863367 (Round to the nearest cent.)
A rather wealthy man decides to arrange for his descendants to be well educated. He wants each child to have $65,000 for his or her education. He plans to set up a perpetual trust fund so that five children will receive this assistance in each generation. He estimates that generations will be spaced 25 years apart. He expects the trust to be able to obtain a 5% rate of return and the first recipients to receive the money 15 years hence. How much money should he now set aside in the trust?
Your grandfather wants to establish a scholarship in his father's name at a local university and has stipulated that you will administer it. As you've committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you'll want to set aside the money for the scholarship immediately. At tomorrow's meeting with your grandfather and the bank's representative, you will need to deposit (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn 4.50% per annum every year. Oops! The bank representative just reported that he misquoted the available interest rate on the scholarship's account. Your account should earn 7.00%. The amount of your required deposit should be revised to relationship between the interest rate earned on the account and the present value of the perpetuity. This suggests there is
James deposits $266.40 each month into an annuity account for his child's college fund in order to accumulate a future value of $80,000 in 18 years. How much of the $80,000 will James ultimately deposit in the account, and how much is interest earned? Round your answers to the nearest cent, if necessary.
Andrew deposits $306.06 each month into an annuity account for his child's college fund in order to accumulate a future value of $80,000 in 16 years. How much of the $80,000 will Andrew ultimately deposit in the account, and how much is interest earned? Round your answers to the nearest cent, if necessary.
A man intends to save up money for his retirement so that he can withdraw equal sums of P18,000 for his yearly needs from his 60th to 70th birthdays. For his 41st to 59th birthdays, he invests an equivalent amount in a fund that earns 12%. What should the amounts for each of them be?
Jessie is thinking of establishing a fund for his daughter’s college education. He wants his daughter to be able to withdraw P60,000from the fund on her 18th birthday, again on her 19th birthday, again on her 20th birthday, up to her 23rd birthday. If the fund earns interest at 12% per year compounded annually, how much should Jessie deposit at the end of each year, fromthe time his daughter reaches 5 years old up to her 17th birthday?
Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $25,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, How much will need to deposit? rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn 5.50% per annum every year. The bank representative just reported that he misquoted the available interest rate on the scholarship’s account. Your account should earn 3.50%. The amount of your required deposit should be revised to?
Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $10,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit$200,000 (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn 6.00% per annum every year.
On Chris’ 4th birthday, his great aunt gives him $120,000. His parents place the money in an investment paying 10% simple interest. a) Find the value of the fund on Chris’ 21st birthday. b) Find the amount of interest the fund earned.
Mr. and Mrs. Megabucks would like to set up a college fund for their grandson. They want him to be able to withdraw $1,750 each month for the two years he will be in college. Their grandson is currently celebrating his second birthday. His first college withdrawal will be on his 19th birthday. The college fund will earn j12=2.4%. How much must they deposit today into the college fund? Your Answer: Answer
In 1940, your grandmother put $1000 into a special trust to be paid to a future grandchild (you) 60 years later, in the year 2000. How much will this trust be worth in the year 2000 if it has been earning 8%? How much if it earns 12%.

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