Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are planning to go on a big vacation in 5 years and will want to have spending money of $5,000. If you have an investment account with an APR of 4.38% that compounds monthly, how much would you need to invest now to have enough for your vacation?
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- Assume that you and your family want to go on vacation in 5 years. You are planning to save for the trip. The estimated cost of the trip will be $10,000. You have found an investment that will pay 6% annual interest for the next 5 years. Using Excel, calculate the dollar amount that will be required to invest today to reach the financial expense for your vacation.arrow_forwardSuppose you want to buy a vacant lot for your future home for $29,673. If your bank is willing to loan you the money at a 6% APR over the next 14 years how much would be your monthly payment? (Round up your answer to two decimal point)arrow_forwardSuppose you plan to have $90,000 in 15 years from now and you can invest your savings at 2% compounded continuously. Assuming you can save the same amount of money each year, how much do you need to save on a yearly basis in order to achieve your goal? Hint: Treat your savings as an income stream. Yearly savings (exact value) = Yearly savings (rounded to the nearest cent) = Submit Answer dollars dollarsarrow_forward
- You plan to invest $9.9 into an investment that you hope will earn a return of 12.01%. You will withdraw your money in 5 years. How much will you withdraw? Answer:arrow_forwardYou want to buy a $30,000 car. You can make a 10% down payment, and will finance the balance with a 3% interest rate for 60 months (5 years). What will your monthly payments be? LAarrow_forwardA real estate property is on the market. You have estimated it will give you net cash flows of $5136 per month. You hope to sell it in 9 years for $308182. Your required return is 9.46%, how much should you be willing to pay for the property today? Answer:arrow_forward
- You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 10.5% per year on your investments and you plan to retire in 36 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 10.5% in retirement)? d. If, instead, you decide to withdraw $270,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…arrow_forward4. Use the present value of an annuity formula to find the maximum car loan that you can afford if you can afford to pay $250 per month, the interest rate is 3%, and you want to have it paid off in 4 years? Assume monthly payments. Write out the formula first to show your work.arrow_forward
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