Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You just purchased a parcel of land for 10,000. If you expect a 12% annual
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- You’re buying your first house for $180,000, giving $35,000 as down payment. The amount you will finance will paid in 40 years with monthly interest rate of 0.5%. What is the value of the equal payments you will have to make for 30 years?arrow_forwardYour goal is to spend a year traveling around the world. You assume that it will cost $100,000 to accomplish this goal and you have 10 years to save for it. You presently have $10,000 to invest. What annual rate of compounding interest must you earn on your investment to cover the cost of this trip?arrow_forwardAn investor plans to invest $500 a year and expects to get a 10.5% return. If the investor makes these contributions at the end of the next 20 years, what is the present value of this investment today?arrow_forward
- You expect to receive $150,000 per year on a contract that will last 5 years. You are trying to compare this offer to a lump sum payment. If you can earn 5% on your investments, how much is the contract worth to you today?arrow_forwardYou just purchased a parcel of land for $54,000. To earn a 11% annual rate of return on your investment, how much must you sell the land for in 5 years? Assume annual compounding. (Round to nearest penny, e.g. 1234.56)arrow_forward3. You are interested in buying a piece of real estate property that could be worth $450,000 in five years. If your earning interest rate is 5%, how much would you be willing to pay for this property now?arrow_forward
- Your 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_forwardThere are three investments being offered to you; one pays you $100,000 at the end of 10 years; another one pays you $90,000 at the end of 9 years; and the other one $130,000 at the end of 11 years. If your required return on investment is 10%, which would you pick?arrow_forwardYou have just retired with savings of $10 million. If you expect to live for 60 years and to earn 8% a year on your savings, how much can you afford to spend each year (in $ dollars)? (Assume that you spend the money at the start of each year.) $arrow_forward
- You just purchased a parcel of land for $40,000. To earn a 9% annual rate of return on your investment, how much must you sell the land for in 3 years? Assume annual compounding. (Round to nearest penny, e.g. 1234.56)arrow_forwardAnd investor plans to invest $500 a year and expect to get a 10.5% return if the investor makes these contributions at the end of the next 20 years what is the present value of this investment todayarrow_forwardYou plan to retire in 20 years. Use present value tables to calculate whether it is better for you tosave $25,000 a year for the last 10 years before retirement or $15,000 for each of the 20 years.Assume you are able to earn 10 percent interest on your investments. Round to the nearest dollar.arrow_forward
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