Your company is investing in a fund that is expected to earn 3% annual interest (compounded...
Your company is investing in a fund that is expected to earn 3% annual interest (compounded annually) for the first 4 years and 9% annual interest (compounded annually) for the next 6 years. If your company invests $1,000 each year for the first 5 years and $12,000 for the remaining 5 years, how much money will be in the fund after 10 years.
Homework Answers
Solution:
| Compuation of future value | |||||
| Year | Beginning balance | Investment | Interest rate | Interest amount | Ending balance |
| 1 | $0.00 | $1,000.00 | 3.0% | $0.00 | $1,000.00 |
| 2 | $1,000.00 | $1,000.00 | 3.0% | $30.00 | $2,030.00 |
| 3 | $2,030.00 | $1,000.00 | 3.0% | $60.90 | $3,090.90 |
| 4 | $3,090.90 | $1,000.00 | 3.0% | $92.73 | $4,183.63 |
| 5 | $4,183.63 | $1,000.00 | 9.0% | $376.53 | $5,560.15 |
| 6 | $5,560.15 | $12,000.00 | 9.0% | $500.41 | $18,060.57 |
| 7 | $18,060.57 | $12,000.00 | 9.0% | $1,625.45 | $31,686.02 |
| 8 | $31,686.02 | $12,000.00 | 9.0% | $2,851.74 | $46,537.76 |
| 9 | $46,537.76 | $12,000.00 | 9.0% | $4,188.40 | $62,726.16 |
| 10 | $62,726.16 | $12,000.00 | 9.0% | $5,645.35 | $80,371.51 |
Amount accumulated in fund after 10 years = $80,371.51
Add Answer to:
Your company is investing in a fund that is expected to earn 3%
annual interest (compounded...
An employee has decided to make annual contributions over a 15-year period into a retirement fund....
An
employee has decided to make annual contributions over a 15-year
period into a retirement fund. She wants to make the first
contribution of $10,000 one year from now (t=1). She then plans to
increase her annual contribution by $1,000 each year for the
remaining years. The fund is expected to earn 10% per year
compounded annually. If she decides to retire in 15 years (from
now), what equal annual amount can she withdraw annually for a
period of 10...
-27 How much invested now at an interest rate of 9% compounded annually would be just...
-27 How much invested now at an interest rate of 9% compounded annually would be just sufficient to provide three payments as follows: the first payment in the amount of $3,000 occurring two years from now, the second payment in the amount of $4,000 five years thereafter, and the third payment in the amount of $5,000 seven years thereafter? 62.34 What is the future worth of a series of equal yearly deposits of $5,000 for 7 years in a savings...
Carla Alvarez is investing $395,500 in a fund that earns 9% interest compounded annually. Click here...
Carla Alvarez is investing $395,500 in a fund that earns 9% interest compounded annually. Click here to view factor tables What equal amounts can Carla withdraw at the end of each of the next 14 years? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) Yearly withdrawals
14. Terma invests $1000 in a mutual fund that grows at 5% compound semi-annually. Kendrick also...
14. Terma invests $1000 in a mutual fund that grows at 5% compound semi-annually. Kendrick also decides to invest his money but ends up investing in a mutual fund that grows at only 3% (sorry Kendrick) that is compounded annually. After how many years will it take for Terma to have twice as much money as Kendrick?
In it's first 10 years, a mutual fund produced an average annual return of 19.17%. Assume...
In it's first 10 years, a mutual fund produced an average annual return of 19.17%. Assume that money invested in this fund continues to earn 19.17% compounded annually. How long will it take money invested in this fund to double? Round your answer to the nearest year.
Someone decides to invest $15000 in a money market fund that guarantees a 4.8% annual interest rate compounded monthly...
Someone decides to invest $15000 in a money market fund that guarantees a 4.8% annual interest rate compounded monthly for 7 years. A one-time fee of $58 is charged to set up the account. In addition, there is an annual administration charge of 0.7% of the balance in the account at the end of each year. (a) How much is in the account at the end of the first year? (b) How much is in the account at the end...
Question 6 0.6 pts Chester deposited $420728 into an account paying 5% interest compounded annual...
Question 6 0.6 pts Chester deposited $420728 into an account paying 5% interest compounded annually with the goal of letting the money accrue interest until the end of year 32. Unfortunately, Chester had a small health crisis at the end of year 10 and had to use the money in the account for several years to help with expenses. Chester made an annual withdrawal of $41167 at the end of each year for 5 years. Chester's health improved and he...
1) Carlos has borrowed $8,000 for 8 years at 6% compounded semi-annually. He will repay interest...
1) Carlos has borrowed $8,000 for 8 years at 6% compounded semi-annually. He will repay interest every 6 months plus principal at maturity. He will also deposit X every 6 months into a sinking fund paying 5% compounded semi-annually to pay off the principal at maturity. a) Find X. Carlos goes bankrupt at the end of year 6, just after making his interest payment and sinking fund deposit. The bank confiscates the money in the sinking fund but gets no...
Alan is investing $40,000 in a fund that earns 5% interest compounded annually. Click here to...
Alan is investing $40,000 in a fund that earns 5% interest compounded annually. Click here to view the factor table. What equal amounts can Alan withdraw at the end of each of the next 11 years? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to O decimal places, e.g. 458,581.) Yearly withdrawals $
Wiseman Video plans to make four annual deposits of $6,500 each to a special building fund. The fund’s assets will be invested in mortgage instruments expected to pay interest at 12% on the fund’s balance. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD o
Wiseman Video plans to make four annual deposits of $6,500 each to a special building fund. The fund’s assets will be invested in mortgage instruments expected to pay interest at 12% on the fund’s balance. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Determine how much will be accumulated in the fund on December 31, 2024 after four years, under each of the...
An
employee has decided to make annual contributions over a 15-year
period into a retirement fund. She wants to make the first
contribution of $10,000 one year from now (t=1). She then plans to
increase her annual contribution by $1,000 each year for the
remaining years. The fund is expected to earn 10% per year
compounded annually. If she decides to retire in 15 years (from
now), what equal annual amount can she withdraw annually for a
period of 10...
-27 How much invested now at an interest rate of 9% compounded annually would be just sufficient to provide three payments as follows: the first payment in the amount of $3,000 occurring two years from now, the second payment in the amount of $4,000 five years thereafter, and the third payment in the amount of $5,000 seven years thereafter? 62.34 What is the future worth of a series of equal yearly deposits of $5,000 for 7 years in a savings...
14. Terma invests $1000 in a mutual fund that grows at 5% compound semi-annually. Kendrick also decides to invest his money but ends up investing in a mutual fund that grows at only 3% (sorry Kendrick) that is compounded annually. After how many years will it take for Terma to have twice as much money as Kendrick?
Question 6 0.6 pts Chester deposited $420728 into an account paying 5% interest compounded annually with the goal of letting the money accrue interest until the end of year 32. Unfortunately, Chester had a small health crisis at the end of year 10 and had to use the money in the account for several years to help with expenses. Chester made an annual withdrawal of $41167 at the end of each year for 5 years. Chester's health improved and he...
1) Carlos has borrowed $8,000 for 8 years at 6% compounded semi-annually. He will repay interest every 6 months plus principal at maturity. He will also deposit X every 6 months into a sinking fund paying 5% compounded semi-annually to pay off the principal at maturity. a) Find X. Carlos goes bankrupt at the end of year 6, just after making his interest payment and sinking fund deposit. The bank confiscates the money in the sinking fund but gets no...
Alan is investing $40,000 in a fund that earns 5% interest compounded annually. Click here to view the factor table. What equal amounts can Alan withdraw at the end of each of the next 11 years? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to O decimal places, e.g. 458,581.) Yearly withdrawals $
Most questions answered within 3 hours.
-
For each of the Z-scores below, determine two probabilities
(show four three decimal places): (1) the...
asked 14 minutes ago -
Oxidative phosphorylation is achieved through chemiosmotic
coupling, which turns chemical energy into osmotic potential energy
that...
asked 2 hours ago -
Hollywood Shoes would like to maintain their cash account at a
minimum level of $64,000, but...
asked 2 hours ago -
Proteins CtrA-P, DnaA, and GcrA behave similarly to what
molecule in the Eukaryotic Cell Cycle?
asked 3 hours ago -
TRUE OR FALSE
In case of a competitive tender procedure, in the request for
quotation, the...
asked 3 hours ago -
I am a little behind please provide some explanation, will
provide thumbs up.
This question considers...
asked 3 hours ago -
Let say the utility function as U(X,Y) = lnX + Y. Show that the
marginal rate...
asked 3 hours ago -
A current of I=8.0A is flowing in a typical extension cord of
length L=3.00m. The cord...
asked 3 hours ago -
1. When balancing the equation H2SO4 (aq) + NaOH (aq) →
Na2SO4(aq) + H2O(aq), would you...
asked 3 hours ago -
Provide a definition of “classification hierarchy” and
illustrate your definition with an example of how and...
asked 3 hours ago -
1. Describe the four main green solvents. Provide one example of
the use of each solvent....
asked 3 hours ago -
International ethics focus on:
1) exploitation of labor
2)corruption
3) environmental impact
4) none of the...
asked 3 hours ago