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- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?You want to accumulate $1 million by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with the first occurring today. The bank pays 8% interest, compounded annually. You expect to receive annual raises of 3%, which will offset inflation, and you will let the amount you deposit each year also grow by 3% (i.e., your second deposit will be 3% greater than your first, the third will be 3% greater than the second, etc.). How much must your first deposit be if you are to meet your goal?
- An investment will give you monthly payments of $1972.19 for 8 years. You will receive your first payment today. If your required return is 9.6%, what is it worth today? You plan to start investing and will invest $180.94 per month. You will make your first deposit today. If the rate is 8.4%, how much will you have in 15 years?You are going to deposit $17,500 today. You will earn an annual rate of 2.7 percent for 8 years, and then earn an annual rate of 2.1 percent for 11 years. How much will you have in your account in 19 years?Suppose an investment will pay $21,000 in 29 years from now. If you can earn 11.35% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today?
- You will deposit $354 each year into an investment account that earns 5% interest (as an effective annual rate, EAR). Your first deposit will be exactly one year from today, and you'll make a total of 10 deposits. How much will be in your account 10 years from today?You plan to make annual deposits of $5,000 per year at the beginning of each year into your retirement account. Your goal is to have $800,000 If you expect to get an 8% rate of return, how many years will it take you to reach your goal?Your first deposit of $5,000 will be made today. You also plan to make four additional deposits at the beginning of each of the next four years. Your plan is to increase your deposits by 10% a year. (That is, you plan to deposit $5,500 at t = 1, and $6,050 at t = 2, etc.) Your deposits earn a 14% return. What is the present value today of all the deposits you have made?
- If you save $1298 per year for the next 17 years and earn 7.2% interest on your savings, how much will you expect to have at the end of 17 years? Assume deposits are made at the beginning of each year. Give your answer in dollars to the nearest one dollar.You plan to invest $2,000 per year into a retirement account. If you earn a compound annual rate of return of 5%, how many years will it take you to reach a balance of $500,000?You have $42,180.53 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $250,000. You expect to earn 12% annnually on the account. How many years will it take to reach your goal?
