● Question 1< >John is 25 years old and wants to have 1 million dollars in savings by the time he retires at 65. He plans toopen a savings account that pays 4% Interest compounded quarterly and he will be making quarterlydeposits of $250 Into the account.John will need to make an initial deposit of sTime Value of Money SolverEnter the given values.N:=0Number of Payment Periods01:%Annual Interest Rate as a PercentPV:Present ValuePMT:Payment00FV:Future ValueP/Y:12Payments per Year0OMSolveSolveSolveSolveSolveto reach his goal of 1 millionhp

Given information,Current age: yearsFuture value: Retiring age: yearsInterest rate: Compounding…

John is 25 years old and wants to have 1 million dollars in savings by the time he retires at 65. He plans to open a savings account that pays 4% Interest compounded quarterly and he will be making quarterly deposits of $250 Into the account. John will need to make an initial deposit of s to reach his goal of 1 million

John is 25 years old and wants to have 1 million dollars in savings by the time he retires at 65. He plans to open a savings account that pays 4% Interest compounded quarterly and he will be making quarterly deposits of $250 Into the account. John will need to make an initial deposit of s to reach his goal of 1 million

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

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You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Use 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?
Give only typing answer with explanation and conclusion To supplement your retirement, you estimate that you need to accumulate $320,000 exactly 40 years from today. You plan to make equal, end-of-year deposits into an account paying 6% annual interest. a. How large must the annual deposits be to create the $320,000 fund by the end of 40 years? b. If you can afford to deposit only $1,740 per year into the account, how much will you have accumulated in 40 years?
6. Computing Future Value of Annual Deposits. What amount would you have if you L deposited $2,500 a year for 30 years at 8 percent (compounded annually)? (Use time value of money calculations in Chapter 1 Appendix.) e here to search 17 to 4M to 144 16 40 73 14 I01 12 米 E T 00 86 R 4. 24 3.
Q1. You have been told that you need $x today in order to have $100,000 when you retire 20 years from now. The annual interest rate is 5% on average. Computex. Answer Q2. You plan to make a $40,000 contribution to your individual retirement account, at 3.5 percent per year on average. Compute how much it will be worth if you deposit it for 25 years. Answer Q3. Repeat Q1-Q2, when the interest rate is being componded every SIX MONTHS (or SEMIANNUALLY). Answer Q4. Erica is purchasing a financial instrument that will pay $5,000 a year for seven years, at the end of every year. How much should she pay for this investment today if she wishes to earn a 12 percent rate of return? Answer Q5. Repeat Q5, when you are committed to making contributions at the beginning of every year. Answer Q6. Solve for x: Jane recently purchased a new home with a mortgage of $x. She financed it at 6.6 percent interest with annual installments of $36,000 for thirty years. Answer Q7. Solve for x: Jane recently…
1. You deposit GHS10,000 today into an account paying 6% annual interest and leave it on deposit for exactly eight years. Required: How much will be the amount in the account at the end of eight years if interest is compounded annually? 2. Imagine you are a professional personal finance planner. One of your clients ask you the following question. Use time value of money technique to develop appropriate responses in each question. I borrowed GHS75,000, am required to repay it in six equal (annual) end of year instalments of GHS3,344 and want to know what interest rate I am paying.
John is 25 years old and wants to have 1 million dollars in savings by the time he retires at 65. He plans to open a savings account that pays 5% Interest compounded quarterly and he will be making quarterly deposits of $250 Into the account. John will need to make an initial deposit of $ Time Value of Money Solver Enter the given values. N: = 0 Number of Payment Periods 0 1:% = Annual Interest Rate as a Percent PV: = Present Value PMT: = 0 Payment FV: = Future Value 0 0 P/Y: 12 Payments per Year C/Y: 12 V Compounding Periods per Year PMT: = END M 39 Solve Solve Solve Solve Solve to reach his goal of 1 million G &
Through your career, you have saved-up $1,150,000. You are now ready to retire. You discuss your plans with your bank's financial adviser. He informs you that you can establish an annuity that will pay $68,000 per year for 25 years. What is the implied rate the bank is offering? O 3.58% ○ 2.75% O 3.26% ○ 3.40%
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PROBLEM SITUATION: Just in preparation for his retirement, a man intended to invest today into a bank with an interest rate of 2.5% compounded quarterly. QUESTION: At what nominal interest rate compounded semi-annually, can a Php 3,408,723.219 invested today can provide the annual fund of P100, 000 and will start at the end of 20 years from now & thereafter? 2.05% 2.10% 2.50% 2.00%