Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You hire Thomas to work for you for five years, and you agree to put away enough money as a lump sum now to fund an
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- Hank made payments of $161 per month at the end of each month for 30 years to purchase a piece of property. He promptly sold it for $136,752. What interest rate, compounded monthly, would he need to earn on an ordinary annuity for a comparable rate of return? (Round to the nearest hundredth as needed.)arrow_forwardGabriel plans to retire when he has $1,500,000 in his bank account, and he does not want to work more than 30 years. If this account has a APR of 5.4%, determine the minimum monthly annuity payment he would need to make. Round your answer to the nearest dollar.arrow_forwardAdditionally complete the following problems (showing all work): i. Joshua plans to retire in 25 years. He will make 15 years of equal monthly payments into his account. Ten years after his last contribution, he will begin the first of 120 (10 years) of withdrawals of $2900 per month. Assume that the retirement account earns interest of 5.4% compounded monthly for the duration of his contributions, the 10 years in between his contributions and the withdrawals, and the 10 years of withdrawals. How large must Joshua's monthly contributions be in order to accomplish his goal? (The parts below will help you work through this problem.) (a) If Joshua wants to fund 10 years of monthly withdrawals of $2900 at 5.4% interest, compounded monthly, how much needs to be in the account? (b) Use your answer from part (b) as future value to find the present value of a compound interest account for the intervening 10 years. (c) This gives you the amount in the account at the end of the 15 years of…arrow_forward
- Mr. Reyes wants to retire 15 years from now. Aside from the retirement benefits from his company and the social security benefits that he will get, Mr. Reyes wants to have an additional 2 million pesos when he retires. To achieve this goal, he will make equal annual deposit at the end of each year for the next 15 years in an account that earns 5% interest per annum. How much should Mr. Reyes deposit each year?arrow_forwardMr. X is planning for her retired life. She has 10 more years of service. He would like to deposit 20% of his salary, which is P 5,000, at the end of the first year, and thereafter he wishes to deposit the amount with an annual increase of P 500 for the next 9 years with an interest rate of 12%. What is the equivalent uniform annual deposit for the next 10 years?arrow_forwardRyan plans to deposit his annual bonus into a savings account that pays 3% interest compounded annually. The size of his bonus increases by $1000 each year, and the initial bonus amount he will deposit at the end of year 1 is $2500. A) Determine how much will be in the account after the 6th deposit? B) What’s the future value if he only plans to deposit his annual bonus for 8 years? C) What’s the future value if he only plans to deposit his annual bonus for 8 years, but also plans to skip the deposits at the end of years 3 and 6?arrow_forward
- Please explain and solve with detailed workingsarrow_forwardYou want to be able to withdraw $20,000 from your account each year for 30 years after you retire. You expect to retire in 25 years. If your account earns 8% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?arrow_forwardYou are saving for the graduation (4 years) of your two children. They are two years apartin age; one will begin university in 15 years from today, the other will begin in 17 yearsfrom today. You estimate your children’s university expenses to be $21,000 per year perchild. The annual interest rate is 15 percent. How much money must you deposit in anaccount each year to fund your children’s education? You will begin payments one yearfrom today. You will make your last deposit when your oldest child enters university.arrow_forward
- Hank made payments of $205 per month at the end of each month for 30 years to purchase a piece of property. He promptly sold it for $175,751. What annual interest rate would he need to earn on an ordinary annuity for a comparable rate of return? (Answer should be a percentage rounded to the nearest hundredth as needed)arrow_forwardAn investor deposits $100 into his credit union account that pays interest at the rate of 3.25% per year (payable at the end of each year). He leaves the money and all accrued interest in the account for 7 years. How much will he have at the end of the 7 years?arrow_forward4. Amy Johnson wants to retire on $75,000 per year for her life expectancy of 20 years after she retires. She estimates that she will be able to earn an interest rate of 10.1%, compounded annually, throughout her lifetime. To reach her retirement goal, Amy will make annual contributions to her account for the next 30 years. One year after making her last deposit, she will receive her first retirement check. How large must her yearly contribution be?arrow_forward
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