ZuoTi.Pro
Question

You will make the following investments for a trip around the world: $2,600 today, $4,000 at...

You will make the following investments for a trip around the world: $2,600 today, $4,000 at the end of year two, and $1500 at the end of year five. (A) How much will you have in six years if you can earn 4.2% on your investments? (B) What equivalent amount could you put away today as a lump sum and have the same amount in six years?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Future value = present value*(1+ rate)^time
Future value = 2600*(1+0.042)^6
Future value = 3327.97
Future value = present value*(1+ rate)^time
Future value = 4000*(1+0.042)^4
Future value = 4715.53
Future value = present value*(1+ rate)^time
Future value = 1500*(1+0.042)^1
Future value = 1563

Total future value = 3327.97+4715.53+1563=9606.5

Future value = present value*(1+ rate)^time
9606.5 = Present value*(1+0.042)^6
Present value = 7505.14
0 0
Add a comment
Know the answer?
Add Answer to:
You will make the following investments for a trip around the world: $2,600 today, $4,000 at...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • On January 1, you plan to take a trip around the world upon graduation four years...

    On January 1, you plan to take a trip around the world upon graduation four years from now. Your grandmother wants to deposit sufficient funds for this trip in an investment account for you. On the basis of a budget, you estimate that the trip currently would cost $17,000. Being the generous and sweet lady she is, your grandmother decided to deposit $4,000 in the fund at the end of each of the next four years, starting on December 31,...

  • Assume you can earn 9% on the investments described below. How much money would each investment...

    Assume you can earn 9% on the investments described below. How much money would each investment provide for you after six years? a. Invest $4,300 as a lump sum today. b. Invest $1,468 at the end of each of the next 6 years. c. Invest a lump sum of $2,559 today and $880 at the end of each of the next 6 years. d. Invest $798 at the end of years 1, 3, and 5.

  • Assume you can earn 9% on the investments described below. How much money would each investment...

    Assume you can earn 9% on the investments described below. How much money would each investment provide for you after six years? a. Invest $6,300 as a lump sum today. b. Invest $2,441 at the end of each of the next 6 years c. Invest a lump sum of $4,299 today and $1,239 at the end of each of the next 6 years d. Invest $1,111 at the end of years 1, 3, and 5

  • If you invest $10,000 today and earn a 20% annual internal rate of return (IRR) over...

    If you invest $10,000 today and earn a 20% annual internal rate of return (IRR) over five years (with all of the proceeds received at the end of the fifth year), then the amount you will receive at the end of the fifth year is: How much would you pay today for an investment offering a lump sum of $100,000 in five years if you hoped to earn an annual rate of return of 25%? You invest $300,000 today and...

  • You are saving for a trip around the world in 7 years. You have a guaranteed...

    You are saving for a trip around the world in 7 years. You have a guaranteed job for the next 3 years and can deposit $5,000/year into a savings account for that time. After that you do not have any jobs lined up and will assume you will not be able to deposit anything in that savings account for the next 4 years. If the rate is 5% on this savings account during this entire time, how much money will...

  • c.)“Give me $10,000 today and I'll return $16,000 to you in five years," offers your investment...

    c.)“Give me $10,000 today and I'll return $16,000 to you in five years," offers your investment broker. To the nearest tenth of a percent, what annual interest rate is being offered? d.)How much money would you have to put away at the end of each year to have $1,600,000 when you retire 26 years from now if you can earn 4% on your money? e.)How much can be accumulated if $2,375 is deposited at the end of each month for...

  • Please help! Please explain with calculator inputs. Thank you. You have just won a lawsuit. The settlement will pay either a single lump sum settlement today, or the following cash flows (assume the f...

    Please help! Please explain with calculator inputs. Thank you. You have just won a lawsuit. The settlement will pay either a single lump sum settlement today, or the following cash flows (assume the following cash flows come at the end of the period): Year 1: $10,000 Years 2-4: $ 5,000 Years 5 onward (forever): $ 3,000 You can presently earn 8% on your investments. What is the least you should accept today as a lump sum settlement?

  • When you retire 50 years from now, you want to have $2,000,000 million. You think you...

    When you retire 50 years from now, you want to have $2,000,000 million. You think you can earn an average of 8 percent on your investments. To meet your goal, you are trying to decide whether to deposit a lump sum today, or to wait and deposit a lump sum 2 years from today. How much more will you have to deposit as a lump sum if you wait for 2 years before making the deposit? Group of answer choices...

  • 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

  • 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 $4,000 per year with the first investment made one year from now. You think you can earn 7.0% per year on your investments and you plan to retire in 45 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT