Homework Answers
Present value = 
Hence, the amount that you should be willing to pay = $6215.80
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How much should you be willing to pay for a lump sum of $7,000 3 years...
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How much should you be willing to pay for a lump sum of $2,000 7 years from now if you can earn 4% every 6 months on other similar investments?
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 5.0% per year on your investments and you plan to retire in 27 years, immediately after making your last S5,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing S5,000 per year, you wanted to...
(Complex present value) You would like to have $30,000 in 16 years. To accumulate this amount...
(Complex present value) You would like to have $30,000 in 16 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 7 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 this lump-sum...
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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
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Investor is able to make 5% compounded annually on other
investments. (This 5% discount rate can be thought of as an
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How much would you be willing to pay today for an annuity that promises to pay...
How much would you be willing to pay today for an annuity that promises to pay $3,882 per year for 12 years, beginning exactly one year from today. Your relevant interest rate is 6 percent. DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR
Messi Company is considering an investment that will return a lump sum of $720,000 4 years...
Messi Company is considering an investment that will return a
lump sum of $720,000 4 years from now.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
What amount should Messi Company pay for this investment to earn an
9% return? (Round answer to 2 decimal places, e.g.
25.25.)
Messi Company should pay
$
Click if you would like to
Show Work for this question:
Open Show Work
How much should you be willing to pay for a lump sum of $2,000 7 years from now if you can earn 4% every 6 months on other similar investments?
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 5.0% per year on your investments and you plan to retire in 27 years, immediately after making your last S5,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing S5,000 per year, you wanted to...
(Complex present value) You would like to have $30,000 in 16 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 7 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 this lump-sum...
P4A.8 (similar to) Question Help The following table. . lists the lump sum payout, the timing of that payout, and the discount rate associated with five different investments. Calculate the present value of each investment The present value, PV, of the future sum of Investment A is $ I (Round to the nearest cent.) 11% Investment Future Sum Discount Rate Payout at End of Year $5,000 7% $32,000 2% $11,000 $150,000 6% $40,000 25% (Click on the icon located on...
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...
How much would you be willing to pay today for an annuity that promises to pay $3,882 per year for 12 years, beginning exactly one year from today. Your relevant interest rate is 6 percent. DO NOT USE DOLLAR SIGNS OR COMMAS IN YOUR ANSWER. ROUND ANSWER TO THE NEAREST DOLLAR
Messi Company is considering an investment that will return a
lump sum of $720,000 4 years from now.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
What amount should Messi Company pay for this investment to earn an
9% return? (Round answer to 2 decimal places, e.g.
25.25.)
Messi Company should pay
$
Click if you would like to
Show Work for this question:
Open Show Work
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