ZuoTi.Pro
Question

You need $4,500 in two years to take some courses only offered in the summer. You...

You need $4,500 in two years to take some courses only offered in the summer. You can earn a 4% interest rate on your investment compounded quarterly. How much should you invest today in a lump sum to achieve your goal?

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 = $4,500

Time Period = 2 years = 8 quarters

Interest Rate = 4% compounded quarterly

Present Value = 4500/(1.01)8

Present Value = $4,155.67

Amount to be Invested = $4,155.67

0 0
Add a comment
Know the answer?
Add Answer to:
You need $4,500 in two years to take some courses only offered in the summer. You...
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

  • You need $40,000 in ten years for the purchase of a new car for your nephew...

    You need $40,000 in ten years for the purchase of a new car for your nephew who will be graduating college.  You currently have $20,000 saved and want to invest it for ten years at a 6% rate of return. Will you be able to achieve your investment goal in ten years? Answer If not, then how much more would you need to invest today, instead of the $20,000, to accumulate that goal in ten years? Answer If not, and you...

  • 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

  • ignore the handwriting can somebody solve these two . 2 3. Suppose that you are planning...

    ignore the handwriting can somebody solve these two . 2 3. Suppose that you are planning to send your daughter to college in 18 years. Furthermore, assume that you have determined that you will need $100,000 at that time in order to pay for tuition, room and board, party supplies, etc. If you believe that you can earn an average annual rate of return of 8% per year, how much money would you need to invest today as a lump...

  • hello. i need some help in this. Name: Calculation of Present Value of a Lump Sum...

    hello. i need some help in this. Name: Calculation of Present Value of a Lump Sum You have been offered a security investment such as a bond that will pay you Php 10,000 at the end of 6 years in exchange for a fixed payment today, the appropriate annual interest rate on the investment is 12% compounded annually, what is the present value of the investment? Calculation of Future Value of a Lump Sum You plan to invest Php 10,000...

  • 51. You have your choice of two investment accounts. Investment A is a 10 year annuity...

    51. You have your choice of two investment accounts. Investment A is a 10 year annuity that features end of month $1,145 payments and has an interest rate of 7% compounded monthly. Investment B is an annually compounded lump – sum investment with an interest rate of 9%, also good for 10 years. How much money would you need to invest in B today for it to be worth as much as Investment A 10 years from now.

  • You have $10,000 to invest for five years. You are offered with two investments. • How...

    You have $10,000 to invest for five years. You are offered with two investments. • How much additional interest will you earn from the investment providing a 5% annual return compared to an investment of a 4% annual return? • How much additional interest will you earn if the interests are compounded semi-annually for both investments?

  • How much should you invest each month in order to have $300,000 if your rate of...

    How much should you invest each month in order to have $300,000 if your rate of return is 7% compounded monthly and you want to achieve your goal in 40 years? $ How much interest will you earn? $ How much should you invest each month in order to have $300,000 if you want to achieve your goal in 20 years? $ If you deposit the amount you need to achieve your goal in 20 years, how much will your...

  • You have your choice of two investment accounts. Investment A is a 6-year annuity that features...

    You have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $2,380 payments and has an interest rate of 10 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 12 percent, also good for 6 years. How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and...

  • You have your choice of two investment accounts. Investment A is a 10-year annuity that features...

    You have your choice of two investment accounts. Investment A is a 10-year annuity that features end-of-month $1,525 payments and has an interest rate of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 9 percent, also good for 10 years. How much money would you need to invest in B today for it to be worth as much as Investment A 10 years from now? (Do not round intermediate calculations and...

  • You have your choice of two investment accounts. Investment A is a 14-year annuity that features...

    You have your choice of two investment accounts. Investment A is a 14-year annuity that features end-of-month $1,200 payments and has a rate of 6.9 percent compounded monthly. Investment B is a lump-sum investment with an interest rate of 6.4 percent compounded continuously, also good for 14 years.      How much money would you need to invest in B today for it to be worth as much as Investment A 14 years from now? (Do not round intermediate calculations and...

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