Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a...

Question

Question

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a...

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a new roof in 5 years. He estimates the roof will cost him $10,300 at that time.

What amount should Jim invest today at 12% compounded quarterly to be able to pay for the roof? (Do not round intermediate calculations. Round your answer to the nearest cent.)

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer

quarterly effective interest rate =annual nominal rate /number of compounding =12/4=3%=i

n=number of quarters =5*4=20

FV=future value=10300

PV=presentt value =?

PV=FV*(1+i)^(-n)

=10300*(1.03^-20)

=5702.86027

=5702.86

the value is $5702.86

Add a comment

Answer 2

Similar Homework Help Questions

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a...

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a new roof in 9 years. He estimates the roof will cost him $11,300 at that time. What amount should Jim invest today at 4% compounded quarterly to be able to pay for the roof? (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount to be invested
Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a...

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a new roof in 8 years. He estimates the roof will cost him $11,200 at that time. What amount should Jim invest today at 12% compounded quarterly calculations. Round your answer to the nearest cent.) to pay for the roof? (Do not round intermediate Amount to be invested
Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a new roof in 9 years. He es...

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a new roof in 9 years. He estimates the roof cost him $9,500 at that time. What amount should Jim invest today at 6% compounded quarterly to be able to pay for the roof? (Do not round Intermediate calculations. Round your answer to the nearest cent.) Amount to be invested

Jim Smith believes that in 30 years he will need $80,000 to buy a retirement cottage....

Jim Smith believes that in 30 years he will need $80,000 to buy a retirement cottage. Assuming he gets an interest rate of 9% compounded annually, how much will he have to invest today to reach his retirement goal? (Round your answer to the nearest cent.)
Time value Personal Finance Problem Jim Nance has been offered an investment that will pay him...

Time value Personal Finance Problem Jim Nance has been offered an investment that will pay him $360 three years from today a. If his opportunity cost is 6% compounded annually what value should he place on this opportunity today? b. What is the most he should pay to purchase this payment today? c. If Jim can purchase this investment for less than the amount calculated in part (a), what does that imply about the rate of return that he will...
Sam Long anticipates he will need approximately $226,600 in 13 years to cover his 3-year-old daughter's...

Sam Long anticipates he will need approximately $226,600 in 13 years to cover his 3-year-old daughter's college bills for a 4-year degree How much would he have to invest today at an interest rate of 6 percent compounded semiannually? (Do not round Intermediate calculations. Round your answer to the nearest cent.) Amount

Sam Long anticipates he will need approximately $227,400 in 15 years to cover his 3-year-old daughter’s...

Sam Long anticipates he will need approximately $227,400 in 15 years to cover his 3-year-old daughter’s college bills for a 4-year degree. How much would he have to invest today at an interest rate of 6 percent compounded semiannually? (Do not round intermediate calculations. Round your answer to the nearest cent.)
Sam Long anticipates he will need approximately $225,700 in 10 years to cover his 3-year-old daughter's...

Sam Long anticipates he will need approximately $225,700 in 10 years to cover his 3-year-old daughter's college bills for a 4-year degree. How much would he have to invest today at an interest rate of 10 percent compounded semiannually? (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount
Sam Long anticipates he will need approximately $227,400 in 15 years to cover his 3-year-old daughter's college bil...

Sam Long anticipates he will need approximately $227,400 in 15 years to cover his 3-year-old daughter's college bills for a 4-year degree How much would he have to invest today at an interest rate of 6 percent compounded semiannually? (Do not round intermediate calculations. Round your answer to the nearest cent.)

sam long anticipates he will need approximately 225,400 in 13 years to cover his 3 year...

sam long anticipates he will need approximately 225,400 in 13 years to cover his 3 year okd daughters college bills for a 4 year degree. how much would he have to invest today at an interest rate of 6 percent compounded semiannually? Sam Long anticipates he will need approximately $225,400 in 13 years to cover his 3-year-old daughter's colege bills for a 4-year degree. How much would he have to invest today at an interest rate of 6 percent compounded...

Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a...

Homework Answers

Add Answer to:
Jim Ryan, an owner of a Burger King restaurant, assumes that his restaurant will need a...

Post as a guest

Earn Coins