You plan on going on a 3 month vacation 8 months from now. You can pay...
You plan on going on a 3 month vacation 8 months from now. You can pay $4,500 per month during the vacation, or you can pay $13,000 today. Which alternative should you take and how much does it save you in present value term if your investments earn 3.00% APR (compounded monthly)?
Homework Answers
Value of $4500 for 3 months at the end of 8 months
n=3
pmt=4500
r=0.03/12
Compute PV using excel:
=PV(0.03/12,3,4500,0)
=$13,432.78
Discounting it 8 months back to
present=$13,432.78/(1.0025^8)=$13,167.12
Hence one should pay $13,000 today as it is cheaper
Add Answer to:
You plan on going on a 3 month vacation 8 months from now. You
can pay...
You plan build a sunroom on to your house in 6 months. You will pay for...
You plan build a sunroom on to your house in 6 months. You will pay for the sunroom in 3 installments of $10,000 each. The first payment is seven months from now and the other two payments are eight and nine months from now. If your investments earn 5% APR, compounded monthly, how much must you invest today to cover the cost of the sunroom?
You've lost a lawsuit that requires you to pay $1,500 per month for 120 months starting next month. How much would you h...
You've lost a lawsuit that requires you to pay $1,500 per month for 120 months starting next month. How much would you have to invest today to exactly pay for the lawsuit, if your investments earn 3.00% APR (compounded monthly)? Calculate your answer to the nearest dollar.
You've lost a lawsuit that requires you to pay $1,500 per month for 120 months starting...
You've lost a lawsuit that requires you to pay $1,500 per month for 120 months starting next month. How much would you have to invest today to exactly pay for the lawsuit ,if your investments earn 3.00% APR (compounded monthly)? Calculate your answer to the nearest dollar. Write only the number with no dollar sign or comma (e.g., 3711)
You've lost a lawsuit that requires you to pay $1,500 per month for 120 months starting next month. How much would you h...
You've lost a lawsuit that requires you to pay $1,500 per month for 120 months starting next month. How much would you have to invest today to exactly pay for the lawsuit ,if your investments earn 3.00% APR (compounded monthly)? Calculate your answer to the nearest dollar. Write only the number with no dollar sign or comma (e.g., 3711)
You plan to "go green" and install solar panels on your home in 36 months. The...
You plan to "go green" and install solar panels on your home in 36 months. The solar company has a payment plan whereby you will pay for the panels in 120 monthly payments (installments) starting in month 37 Each monthly installment will be for $200 per month. How much would you have to invest each month (the same amount in each month), starting in one month, for 35 months , to exactly pay for the solar panels ,if your investments...
You plan to go on vacation in 3 year. The vacation wil cost you $10,000 at...
You plan to go on vacation in 3 year. The vacation wil cost you $10,000 at that time. How much do you have to save today in order to exactly pay for your vacation, if your investment account earns 2.00% APR (compounded annually)? $9,615 $9,423 $9,524 $9,105
You plan to buy a house in 18 months. The cost of the house at that...
You plan to buy a house in 18 months. The cost of the house at that time will be $300,000 . How much do you have to invest each month, starting next month, for 12 months to exactly pay for the house if you r investments earn 2.00% APR (compounded monthly)? $22,675 $25,261 $24,525 $23,582 $24,290
You plan to give your wife a ring in 12 months for your 25th anniversary. You...
You plan to give your wife a ring in 12 months for your 25th anniversary. You will buy the ring in 12 months for $30,000. How much will you have to invest each month, starting next month, for eight months to pay for the ring if your investments earn 5% APR, compounded monthly?
You plan to go on vacation in 4 year. The vacation wil cost you $10,000 at...
You plan to go on vacation in 4 year. The vacation wil cost you $10,000 at that time. How much do you have to save today in order to exactly pay for your vacation, if your investment account earns 5.00% APR compounded annually)? $7,949 $9,524 $8,227 $9,615
You plan to buy your "dream car" when you graduate in 12 months. The cost of...
You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How much do you have to invest each month, starting next month, for 29 months to exactly pay for the car if your investments earn 5.00% APR (compounded monthly)? Calculate your answer to the nearest dollar.
You plan to go on vacation in 4 year. The vacation wil cost you $10,000 at that time. How much do you have to save today in order to exactly pay for your vacation, if your investment account earns 5.00% APR compounded annually)? $7,949 $9,524 $8,227 $9,615
Most questions answered within 3 hours.
-
On October 1, 20X1, a company purchased a piece of land by
agreeing to pay the...
asked 5 minutes ago -
Jamie is doing a survey at her school about whether the students
feel the cafeteria food...
asked 10 minutes ago -
What are the roles of 3' and 5' untranslated regions in
mRNAs?
asked 11 minutes ago -
A domestic television receives antenna delivers a sky noise
power of -105 dBm to a matched...
asked 10 minutes ago -
What do you think are the chemical reactions involved in the
breathalyzer tests administered to potentially...
asked 25 minutes ago -
A random sample of 120 observations produces a mean of
38.2 from a population with a...
asked 32 minutes ago -
The average area of land burned by forest fires every year in
Canada is 2.5 million...
asked 34 minutes ago -
36. The basic difference between government bureaus and market
firms is that bureaus:
a. can...
asked 34 minutes ago -
java
- A recursive method findR() to search for a number in list
(ArrayList)
- A...
asked 52 minutes ago -
Which of the following is an example of a screen against adverse
selection? [Mark All That...
asked 51 minutes ago -
A worker drives a 0.560 kg spike into a rail tie with a 2.76 kg
sledgehammer....
asked 57 minutes ago -
Assume the following information concerning two stocks that make
up an index. What is the price-weighted...
asked 1 hour ago