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 make monthly deposits of $70 into a retirement account that pays 11 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 24 years? Multiple Choice O $93,189.59 O $98,094.30 O $102,999.02 O $1,177,131.62 O $85,826.29arrow_forwardMany assets provide a series of cash inflows over time; and many obligations require a series of payments. When the payments are equal and are made at fixed intervals, the series is an annuity. There are three types of annuities: (1) Ordinary (deferred) annuity, (2) Annuity due, and (3) Growing annuity. One can find a annuity's future and present values, the interest rate built into annuity contracts, and the length of time it takes to reach a financial goal using an annuity. Growing annuities are often used in the area of financial planning. Their analysis is more complex and often easier solved using a financial spreadsheet, so we will limit our discussion here to the first two types of annuities. The future value of an ordinary annuity, FVAN, is the total amount one would have at the end of the annuity period if each payment (PMT) were invested at a given interest rate and held to the end of the annuity period. The equation is: Each payment of an annuity due is compounded for one…arrow_forwardHow much can you live on each month with this retirement plan if you are retiring in 38 years? Monthly savings 731 Amount you have reaty today to invest 10,965 Pre - retirement interest rate you can earn 11% post - retirement interest rate yo can earn 6% When you retire, you'll spend 200,000 for a trip around the world You plan to live 30 years after retirement and leave 2 million$ to your children. Monthly living allowance:arrow_forward
- Y8 A person is planning for their future retirement and wishes to have a 10 year pension of 50,000$ per year to her descendants forever. Assuming 5% interest rate how much money they need in their savings account when their retirement starts in 20 yearsarrow_forwardi will 5 upvotes urgentarrow_forwardHow much money does Suzie need to have in her retirement savings account today if she wishes to withdraw $25,000 a year for 3 years? She expects to earn an average rate of return of 13 percent. A. $59,028.81 OB. $65,419.81 OC. $71,533.33 OD. $85,160.98 E. $87,391.34arrow_forward
- You want to retire with $400 000 in the bank and you are able to earn 6% compounded quarterly for the next 25 years. How much money do you have to invest today in order to achieve your goal? Select one: a. $90 251.77 b. $90 201.77 c. $90 001.78 d. $90 251.78 e. $90 001.77arrow_forwardAssume you contribute $210 per month to a retirement plan for 15 years. If contribute nothing else, and assuming a 6.4% interest rate, what is the value of the retirement plan 40 years from today? (Keep 2 decimals. For example, 1,008.51)arrow_forwardSuppose you have $1,000,000 in savings account when you retire. Your plan is to withdraw $6,000 a month as retirement income from this account. You expect to earn annual interest of 5%, compounded monthly, on your money during your retirement. How many months can you be retired until you run out of money? A-210.83 B-262.59 C-220.27 D-285.14arrow_forward
- Your uncle wants to retire in 30 years, and he wants to have an annuity of $1000 a year for 20 years after retirement. He wants to receive the first annuity payment at the end of the 30th year. Using an interest rate of 10%, how much must he invest as a lump sum today in order to have his retirement annuity (round to nearest $10). Multiple Choice O $500 $490 $540 $570 none of the above xarrow_forwardBaghibenarrow_forwardFind the future value of a continuous stream Question A 30-year-old places a continuous stream of $6, 000 per year into a retirement account which has a continuously compounding interest rate of 1.2%. What will be the value of this continuous stream when this person retires at age 65? Round your answer to the nearest integer. Do not include a dollar sign or commas in your answer. Provide your answer below: FEEDBACK MORE INSTRUCTION SUBMITarrow_forward
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