You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1.Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today.How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly?Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices.Option AOption BF=?F=?1201120240240i = 0.5%i= 6%A = 100A = 100Option COption DF=?F=?10102020i= 0.5%i = 6%A = 100A = 100Question 4 Part B: Identify the correct Function Notation for this scenario.F = 100(P/A,0.5%,10)(P/F, 0.5%, 10)O F = 100(F/A,6%,120)(P/F, 6%, 120)O F = 100(F/A,0.5%,120)(F/P, 0.5%, 120)F = 100(F/A,6%,10)(F/P, 6%, 10)Question 4 Part C: Provide the final value for withdrawal at the end of year 20. Enter your answer in the form: 12345.67Question 4 Part D: Choose the statement that is most correct for your answer to Part C.O The amount found in part C will be available to withdraw at the end of year 20.O The amount found in part C will be available to withdraw at the end of each month if the account pays a nominal annual rate of 6% compoundedmonthly.O The amount found in part C will be available to withdraw if the account pays a nominal annual rate of 6% compounded monthly.O The amount found in part C will be available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compoundedmonthly.

given, quaterly deposit = $100 number of years = 10 annual rate = 6% withdrawal year = 20

You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 120 240 240 i= 0.5% i= 6% A= 100 A= 100 Option C Option D F=? F%3D? 10 10 20 20

You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of month 1. Then after leaving the money in the account for several years, you plan to withdraw everything 20 years from today. How much is available to withdraw at the end of year 20 if the account pays a nominal annual rate of 6% compounded monthly Question 4 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices. Option A Option B F=? F=? 120 120 240 240 i= 0.5% i= 6% A= 100 A= 100 Option C Option D F=? F%3D? 10 10 20 20

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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Give typing answer with explanation and conclusion Question 3: You decide to save $1,000 at the end of each year for the next 10 years in an account earning 6% interest annually. What will be the total value of your savings after 10 years?
Could you please do this question with full working?
You have of $1,000,000 to invest. There are two different investment options for you. First option: (1.21*i)% pays simple interest. Second option: pays i% compounding interest rate. What is the value of i that makes the both options pay the same money at the end of second year. Select one: a. 1.21 b. 42 c. 21 d. 5.5 e. 10
Question 6: What is the present value of your end-of-year investment of $1,000 per year, with the first cash flow received three years from today and the last one 10 years from today? Use a discount rate of 12 percent
Many assets provide a series of cash inflows over time; and many obligations require a series of payments. When the payments are equal and are made at fixed intervals, the series is an annuity. There are three types of annuities: (1) Ordinary (deferred) annuity, (2) Annuity due, and (3) Growing annuity. One can find a annuity's future and present values, the interest rate built into annuity contracts, and the length of time it takes to reach a financial goal using an annuity. Growing annuities are often used in the area of financial planning. Their analysis is more complex and often easier solved using a financial spreadsheet, so we will limit our discussion here to the first two types of annuities. The future value of an ordinary annuity, FVAN, is the total amount one would have at the end of the annuity period if each payment (PMT) were invested at a given interest rate and held to the end of the annuity period. The equation is: Each payment of an annuity due is compounded for one…
1. You have two options to purchase a car. Your first option is to purchase the car at $26.200 and pay for it over 36 months with equal monthly payments at 1.9 % interest per year. The second option is for you to purchase the car immediately with cash at a rebate or discounted price lower than $25,000. C. a. Draw a cash flow diagram for the first option b. Using the appropriate compounding interest factor provided on the formula sheet, determine your monthly payments Draw the cash flow diagram that will enable you to determine the equivalent present cost of the total loan repayments you made in (b) above, if funds are presently earning 5 % annual interest compounded annually d. Using the appropriate compounding interest factor provided on the formula sheet, determine the equivalent present cost of the total loan repayments. e. Which of the two options will you choose and why?
Use future value and present value calculations (an online calculator, app, financial calculator, or spreadsheet software) to determine the following: Use Exhibit 1-A, Exhibit 1-B and Exhibit 1-C. a. The future value of a $710 savings deposit after nine years at an annual interest rate of 8 percent. Note: Round FV factor to 3 decimal places and final answer to nearest whole dollar. b. The future value of saving $3,200 a year for three years at an annual interest rate of 7 percent. Note: Round discount factor to 3 decimal places and final answer to nearest whole dollar. c. The present value of a $3,400 savings account that will earn 4 percent interest for six years. Note: Round PV factor to 3 decimal places and final answer to nearest whole dollar. a. Future value b. Future value c. Present value
Problem 1: You can choose between two different investments: (A) an annuity that pays $10,000 each year for the next 6 years; (B) a perpetuity that pays $10,000 forever, starting 11 years from now. 1. Which investment do you choose, A or B, if the interest rate is 5%? What if it is 10%? Explain in words the reason behind your choices.
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A series of cash flows starts at $1,000 at the end of the fırst year and increases each year for the next 9 years. Assume an interest rate of 7%. (Show your solution in steps) a. Determine the future worth if the yearly increase is $100. b. What will be future worth if the yearly increase is at the rate of 5%? Upload Choose a File
Saving Later Plan 2: Invest $350 at the end of each month into an account paying 7.5% compounded monthly for 15 years then leave the money in the account earning interest until retirement (making no additional withdrawals or investments until retirement). Using the assumptions above, write down your answer to each of the following questions. 19. Create the following table of values for this investment plan. Saving Later Plan 2, tuho table should be handwritten) to find the amount available after 15 years. Write N/A next to any variable that does not apply and write Solve next to the appropriate varlable. P%3D r = A = M = n = 20. Indicate the best formula to use to compute the amount available after 15 years. 21. Substitute the values into the formula and compute how much money will be available after 15 years.
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