Jane wants to make an investment which will pay $500 every six months over next five...
Jane wants to make an investment which will pay $500 every six months over next five years. How much should Jane invest if she requires 10% rate of return compounded semiannually?
Homework Answers
It is a case of annuity. We need to find the amount which will result in an annuity of 500 every six months for five years.
The rate of interest is 10% which is compounded semi annually so effective interest rate will be 5% per six months
Number of periods will be 5x2=10
So PVA = 500 x PVIFA (5%,10) = 500 x 7.7217 = $ 3860.85
So Jane is required to invest $ 3860.85 now to get 500 every six months.
Add Answer to:
Jane wants to make an investment which will pay $500 every six
months over next five...
A Government of Canada bond will pay $50 at the end of every six months for...
A Government of Canada bond will pay $50 at the end of every six months for the next 15 years, and an additional $1000 lump payment at the end of the 15 years. What is the appropriate price to pay if you require a rate of return of 6.5% compounded semiannually? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Catherine purchases a retirement annuity that will pay her $2,500 at the end of every six months for the first ten years and $600 at the end of every month for the next six years. The annuity earns interest at a rate of 2.8% compounded quarterly.
Catherine purchases a retirement annuity that will pay her $2,500 at the end of every six months for the first ten years and $600 at the end of every month for the next six years. The annuity earns interest at a rate of 2.8% compounded quarterly.a). What was the purchase price of the annuity?b). How much interest did Catherine receive from the annuity?
Lucy purchases a retirement annuity that will pay her $1,500 at the end of every six...
Lucy purchases a retirement annuity that will pay her $1,500 at the end of every six months for the first eight years and $700 at the end of every month for the next five years. The annuity earns interest at a rate of 3.9% compounded quarterly. a. What was the purchase price of the annuity? Round to the nearest cent b. How much interest did Lucy receive from the annuity? Round to the nearest cent
A young couple wants to have a college fund that will pay $25,000 at the end...
A young couple wants to have a college fund that will pay $25,000 at the end of each half-year for 8 years. (a) If they can invest at 6%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.) A young couple wants to have a college fund that will...
Jane Smith wants to send her son Billy to college. Billy just turned 3 years-old today,...
Jane Smith wants to send her son Billy to college. Billy just turned 3 years-old today, September 1st, and should enter college on his 18th birthday. After doing some research, Jane finds out that the tuition cost today for a year of study in a good university in the US is about $50,000 payable at the beginning of the academic year (September 1st of each academic year). It takes, on average, 4 years to obtain a bachelor’s degree. In addition,...
Your client wants to accumulate $2,400,000 over the next 25 years by investing the same amount...
Your client wants to accumulate $2,400,000 over the next 25 years by investing the same amount at the beginning of each month. If she can expect a long-term rate of return of 9.4% compounded annually, how much must she invest each month? (Do not round intermediate calculations and round your final answer to 2 decimal places.) The client must invest $ at the beginning of each month.
Peter plans to save $1.250 every six months for the next three years; he expects to...
Peter plans to save $1.250 every six months for the next three years; he expects to deposit the money in a bank that pays a rate of 6.8%, compounded semi-annually. How much money will he have in three years? Answer: 8167.15 Next page Assignment #3 Jump to MAT 1060 Chapter 11
A young couple wants to have a college fund that will pay $30,000 at the end...
A young couple wants to have a college fund that will pay $30,000 at the end of each half-year for 8 years. (a) If they can invest at 7%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.) (b) Suppose 8 years after beginning the annuity payments, they receive...
A young couple wants to have a college fund that will pay $35,000 at the end...
A young couple wants to have a college fund that will pay $35,000 at the end of each half-year for 8 years. (a) If they can invest at 9%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.) $ 4563.28 (b) Suppose 8 years after beginning the annuity payments,...
Jane plans to buy a house in 10 years. The house she dreams about costs about...
Jane plans to buy a house in 10 years. The house she dreams about costs about $150,000 today. The cost of houses increases at 2.5% per year. How much will the house cost in ten years? Jane currently has $75,000 that she can invest to earn 3% interest over the next ten years. How much will Jane accumulate from her investment of 75,000 Dollars in ten Years? How much additional money would Jane need in ten years? In effect, how...
Peter plans to save $1.250 every six months for the next three years; he expects to deposit the money in a bank that pays a rate of 6.8%, compounded semi-annually. How much money will he have in three years? Answer: 8167.15 Next page Assignment #3 Jump to MAT 1060 Chapter 11
A young couple wants to have a college fund that will pay $30,000 at the end of each half-year for 8 years. (a) If they can invest at 7%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.) (b) Suppose 8 years after beginning the annuity payments, they receive...
A young couple wants to have a college fund that will pay $35,000 at the end of each half-year for 8 years. (a) If they can invest at 9%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.) $ 4563.28 (b) Suppose 8 years after beginning the annuity payments,...
Most questions answered within 3 hours.
-
Implement the Unsorted, sorted and indexed lists using Linked
List base structure. (LLNode class under support...
asked 1 minute ago -
Exercise 5-21 Income (loss) recognition; Long-term contract;
revenue recognition over time vs. upon project completion
[LO5-9]...
asked 4 minutes ago -
A rich aunt has promised you $2,090.00, one year from today. In
addition, each year after...
asked 4 minutes ago -
Data from the past shows that on average, a ready-mixed concrete
plant receives 100 orders for...
asked 1 hour ago -
The table below shows the number of state-registered automatic
weapons and the murder rate for several...
asked 1 hour ago -
Container A holds 762 mL of ideal gas at 2.60 atm. Container B
holds 144 mL...
asked 1 hour ago -
1)
Why is bulk transport necessary in both plants and animals?
The premise of the question...
asked 1 hour ago -
What is the result of the following in MongoDB?
>use MovieDB
>db.movies.find( { genre: { $ne:...
asked 1 hour ago -
What is the NPV?
r=9.28
c1= 5.853
c2= 6.37 + 1,826.76
asked 1 hour ago -
Please think of 2 on line only retailers that might benefit from
a brick and mortar...
asked 2 hours ago -
The definition of a partition
function involved a sum over all states, and knowledge of the...
asked 3 hours ago -
Which of the following events would be considered Systematic?
(Choose all that apply.)
A. The Federal...
asked 3 hours ago