A person is considering entering into an agreement with an investment company to deposit $979 into...
A person is considering entering into an agreement with an investment company to deposit $979 into a special account at the end of each year for 15 years. At the end of the period, the person would be able to withdraw a lump sum of $28,995. At what rate would the person earn interest, if the interest was compounded annually? (answer: 9.11%)
Could you show me what formula to use to solve for the interest rate.
Homework Answers
Hence, Rate of interest is 9.11%
Add Answer to:
A person is considering entering into an agreement with an
investment company to deposit $979 into...
Solve for the Present Value of a Lump Sum with the Following Situation: Investor has been...
Solve for the Present Value of a Lump Sum with the Following
Situation: Investor has been offered an investment opportunity that
is expected to provide $1,300 cash inflow at the end of five years.
Investor is able to make 5% compounded annually on other
investments. (This 5% discount rate can be thought of as an
opportunity cost of capitalthe return the investor is forgoing on
an alternative investment of equal risk). How much can the investor
pay today for this...
You have two choices of investments: Investment A is a 15-year annuity that requires end-of-quarter $1,400...
You have two choices of investments: Investment A is a 15-year annuity that requires end-of-quarter $1,400 payments that earn an interest rate of 9% compounded quarterly. - Investment B is a 15-year lump sum investment that earns an interest rate of 11% compounded annually. How much money would you need to invest in Investment B today for it to be worth as much as Investment A 15 years from now? 1) $34,415 2) $40,415 3) $36,415 4) $42,415 5) $38,415
a. Given: Mr. Uga has $100 million to invest. He wants his investment to triple in...
a. Given: Mr. Uga has $100 million to invest. He wants his investment to triple in 6 years. A bank offers him an attractive rate of return that is compounded monthly. Solve for: What interest rate per month should the bank pay Mr. Uga in order for his investment to triple in 6 years? b. Given: Mr. Buga would like to invest a lump sum of money today in order withdraw $10,00 five years from today, $10,000 ten years from...
51. You have your choice of two investment accounts. Investment A is a 10 year annuity...
51. You have your choice of two investment accounts. Investment A is a 10 year annuity that features end of month $1,145 payments and has an interest rate of 7% compounded monthly. Investment B is an annually compounded lump – sum investment with an interest rate of 9%, also good for 10 years. How much money would you need to invest in B today for it to be worth as much as Investment A 10 years from now.
1. You would like to save $70 000 in 10 years. To accumulate this amount, you...
1. You would like to save $70 000 in 10 years. To accumulate this amount, you plan to make a regular deposit with an equal amount of cash into a saving account at the end of each year. This account will earn 6% p.a interest compounded annually. Your first payment will be made at the end of this year. a. How much must you deposit annually to accumulate this amount in 10 years? b. If you decide to make a...
help Por Jou pie M ICELIUI SCVCIl years. Which option is better? Interest effective and Interest...
help
Por Jou pie M ICELIUI SCVCIl years. Which option is better? Interest effective and Interest compounded 5. Suppose your savings account pays 9% interest compounded quarterly. If you deposit $25,000 for one year, how much would you have? 6. If your credit card calculates the interest based on 12.5% APR, what is your monthly interest rate and annual effective interest rate, respectively? ut, pelivery The Concept of Equivalence 7. Suppose that, to purchase a car, you are obtaining a...
1) Calculate the amount of money an investment banker would have to deposit in an investment fund...
1) Calculate the amount of money an investment banker would have to deposit in an investment fund that will provide him $1500 at the beginning of each month for 11 years. He receives his first payment 3 years and 4 months from now and the interest rate is 5.16% compounded semi-annually.
1) Calculate the amount of money an investment banker would have to deposit in an investment fund that will provide him $1500 at the beginning of each month for...
You have your choice of two investment accounts. Investment A is a 6-year annuity that features...
You have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $2,380 payments and has an interest rate of 10 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 12 percent, also good for 6 years. How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and...
Investment A You are 25 years old, having just started working. You are considering a retirement...
Investment A You are 25 years old, having just started working. You are considering a retirement plan for a retirement at the age of 65. You want to be able to withdraw $79,000 from your savings account on each birthday for 20 years following your retirement at the age of 65. Your first withdrawal will be on your 66th birthday. To achieve your goal, you intend to make equal annual deposits in a pension scheme which offers 7% interest per...
Complex present value) You would like to have $56 comma 000 in 16 years. To accumulate...
Complex present value) You would like to have $56 comma 000 in 16 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 6 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should...
Solve for the Present Value of a Lump Sum with the Following
Situation: Investor has been offered an investment opportunity that
is expected to provide $1,300 cash inflow at the end of five years.
Investor is able to make 5% compounded annually on other
investments. (This 5% discount rate can be thought of as an
opportunity cost of capitalthe return the investor is forgoing on
an alternative investment of equal risk). How much can the investor
pay today for this...
You have two choices of investments: Investment A is a 15-year annuity that requires end-of-quarter $1,400 payments that earn an interest rate of 9% compounded quarterly. - Investment B is a 15-year lump sum investment that earns an interest rate of 11% compounded annually. How much money would you need to invest in Investment B today for it to be worth as much as Investment A 15 years from now? 1) $34,415 2) $40,415 3) $36,415 4) $42,415 5) $38,415
a. Given: Mr. Uga has $100 million to invest. He wants his investment to triple in 6 years. A bank offers him an attractive rate of return that is compounded monthly. Solve for: What interest rate per month should the bank pay Mr. Uga in order for his investment to triple in 6 years? b. Given: Mr. Buga would like to invest a lump sum of money today in order withdraw $10,00 five years from today, $10,000 ten years from...
1. You would like to save $70 000 in 10 years. To accumulate this amount, you plan to make a regular deposit with an equal amount of cash into a saving account at the end of each year. This account will earn 6% p.a interest compounded annually. Your first payment will be made at the end of this year. a. How much must you deposit annually to accumulate this amount in 10 years? b. If you decide to make a...
help
Por Jou pie M ICELIUI SCVCIl years. Which option is better? Interest effective and Interest compounded 5. Suppose your savings account pays 9% interest compounded quarterly. If you deposit $25,000 for one year, how much would you have? 6. If your credit card calculates the interest based on 12.5% APR, what is your monthly interest rate and annual effective interest rate, respectively? ut, pelivery The Concept of Equivalence 7. Suppose that, to purchase a car, you are obtaining a...
1) Calculate the amount of money an investment banker would have to deposit in an investment fund that will provide him $1500 at the beginning of each month for 11 years. He receives his first payment 3 years and 4 months from now and the interest rate is 5.16% compounded semi-annually.
1) Calculate the amount of money an investment banker would have to deposit in an investment fund that will provide him $1500 at the beginning of each month for...
Most questions answered within 3 hours.
-
The energy required to remove an electron from a surface of a
solid element is called...
asked 32 seconds ago -
How would you train your employees to avoid risks of using
mobile devices?
asked 23 minutes ago -
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 1 hour ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 2 hours ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 2 hours ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 4 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 4 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 5 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 6 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 6 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 6 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 7 hours ago