You have decided that you want to be a millionaire when you retire in 45 years....
| You have decided that you want to be a millionaire when you retire in 45 years. |
| Requirement 1: | |
|
If you can earn an annual return of 9 percent, how much do you have to invest today? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Investment | $ |
| Requirement 2: | |
|
What if you can earn 4.5 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Investment | $ |
Homework Answers
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You have decided that you want to be a millionaire when you
retire in 45 years....
You want to be a millionaire when you retire in 35 years. a. How much do...
You want to be a millionaire when you retire in 35 years. a. How much do you have to save each month if you can earn an annual return of 10.7 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much do you have to save each month if you wait 10 years before you begin your deposits? (Do not round intermediate calculations and round your answer to 2 decimal places,...
Problem 4-25 Calculating Present Values (LO 2] You have decided that you want to be a...
Problem 4-25 Calculating Present Values (LO 2] You have decided that you want to be a millionaire when you retire in 44 years. a. If you can earn an annual return of 11.34 percent, how much do you have to invest today? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if you can earn an annual return of 5.67 percent? (Do not round Intermediate calculations and round your answer to 2...
You plan to retire in exactly 10 years and are worried about the money you will...
You plan to retire in exactly 10 years and are worried about the money you will have to live on during your retirement Requirement 1: You currently have $120,000 in a bond account and you plan to add $5,000 per year at the end of each of the next 10 years to the account. If the bond account earns a return of 5.5 percent per year over the next 10 years, how much will you have in the bond account...
An investment offers the following yearly payments. Year Cash Flow 1 $ 1,110 2 970 3...
An investment offers the following yearly payments. Year Cash Flow 1 $ 1,110 2 970 3 1,500 4 1,860 Requirement 1: If the discount rate is 10 percent, what is the present value of these cash flows? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 2: What is the present value at 18 percent? (Enter rounded answer as directed, but do...
Maybepay Life Insurance Co. is selling a perpetual annuity contract that pays $2.500 monthly. The contract...
Maybepay Life Insurance Co. is selling a perpetual annuity contract that pays $2.500 monthly. The contract currently sells for $265,000. Requirement 1: What is the monthly return on this investment vehicle? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Monthly return Requirement 2: What is the APR? (Round your answer as directed, but do not use rounded numbers in intermediate calculations....
You are scheduled to receive $21,500 in three years. When you receive it, you will invest...
You are scheduled to receive $21,500 in three years. When you receive it, you will invest it for seven more years at 9.50 percent per year. Required: How much will you have in ten years? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Amount
3. Hacker Software has 10.4 percent coupon bonds on the market with 16 years to maturity....
3. Hacker Software has 10.4 percent coupon bonds on the market with 16 years to maturity. The bonds make semiannual payments and currently sell for 108 percent of par. What is the current yield on the bonds? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield % What is the YTM? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)...
The YTM on a bond is the interest rate you earn on your investment if interest...
The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond with an annual coupon rate of 11 percent for $1,200. The bond has 19 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value...
You have $17,500 you want to invest for the next 40 years. You are offered an...
You have $17,500 you want to invest for the next 40 years. You are offered an investment plan that will pay you 6 percent per year for the next 20 years and 10 percent per year for the last 20 years. a. How much will you have at the end of the 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the investment plan pays you 10 percent per year...
You have $20,000 you want to invest for the next 40 years. You are offered an...
You have $20,000 you want to invest for the next 40 years. You are offered an investment plan that will pay you 6 percent per year for the next 20 years and 10 percent per year for the last 20 years. a. How much will you have at the end of the 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the investment plan pays you 10 percent per year...
You want to be a millionaire when you retire in 35 years. a. How much do you have to save each month if you can earn an annual return of 10.7 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much do you have to save each month if you wait 10 years before you begin your deposits? (Do not round intermediate calculations and round your answer to 2 decimal places,...
Problem 4-25 Calculating Present Values (LO 2] You have decided that you want to be a millionaire when you retire in 44 years. a. If you can earn an annual return of 11.34 percent, how much do you have to invest today? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if you can earn an annual return of 5.67 percent? (Do not round Intermediate calculations and round your answer to 2...
You plan to retire in exactly 10 years and are worried about the money you will have to live on during your retirement Requirement 1: You currently have $120,000 in a bond account and you plan to add $5,000 per year at the end of each of the next 10 years to the account. If the bond account earns a return of 5.5 percent per year over the next 10 years, how much will you have in the bond account...
Maybepay Life Insurance Co. is selling a perpetual annuity contract that pays $2.500 monthly. The contract currently sells for $265,000. Requirement 1: What is the monthly return on this investment vehicle? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Monthly return Requirement 2: What is the APR? (Round your answer as directed, but do not use rounded numbers in intermediate calculations....
You are scheduled to receive $21,500 in three years. When you receive it, you will invest it for seven more years at 9.50 percent per year. Required: How much will you have in ten years? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Amount
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