28. Your brother has asked you to help him with choosing an investment. He has $5,200 to invest today for a period of five years. You identify a bank CD that pays an interest rate of 3.60 percent with the interest being paid quarterly. What will be the value of the investment in five years?

28. Your brother has asked you to help him with choosing an investment. He has $5,200 to invest today for a period of five years. You identify a bank CD that pays an interest rate of 3.60 percent with the interest being paid quarterly. What will be the value of the investment in five years?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

See similar textbooks

Related questions

Q: You have just received a windfall from an investment you made in a friend's business. He will be…

Q: Fifteen years ago, you deposited $12,500 into an investmentfund. Five years ago, you added an…

A: Present value lies under time value of money concept which refers to the value of the sum invested…

Q: An investor has purchased an investment which offers him 30 annual payments of dollar 1,200 per…

A: To find the present value of the investment, we will first define where the payments are made. We…

Q: What will be the value of the investment in two years? Select one A. 5441 OMR b. None of these c.…

A: Information Provided: Pricipal = 5000 Term = 2 years Interest rate = 4.25% quarterly

Q: Kershaw wishes to accumulate $2 million by the end of 40 years by making equal annual end-of-year…

A: Amount to be saved(FV) is $2million Time period(NPER) is 40 Years Rate is 10% To Find: Amount to…

Q: 1. An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4,…

A: 1)Calculate the present and future value of an investment: Excel workings:

Q: You have $42,180.53 in a brokerage account, and you plan to deposit an additional $5,000 at the end…

A: Given: PV = Present value = $42,180.53 PMT = Annual payment = $5,000 Future value value = $250,000…

Q: Assume that 1 year from now you plan to deposit €1,000 in a savings account that pays a rate of 8…

A: If the bank compounds interest annually, amount in the account 4 years from now will be =€1,000×FVF…

Q: Seventeen (17) years ago, you deposited $25,500 into an investment fund. Five years ago, you added…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Your brother has asked you to help him with choosing an investment. He has $4,500 to invest today…

A: Future Value: It refers to the value of any investment or asset in a specified future date.

Q: You have $35,009.41 in a brokerage account, and you plan to deposit an additional $5,000 at the end…

A: According to the time value rule, dollar money available today is worth more than the same dollar…

Q: 4. Vincent wants to deposit Php 5,000 at the end of each quarter, for 3 years in a bank that gives…

A: Given Principal = 5,000 Rate (r) = 8% pa or 2 % (8% /4) quarterly Period (n) = 12 periods (3 Yrs…

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: You have $22,241.93 in a brokerage account, and you plan to deposit an additional $4,000 at the end…

A: Present Value = $22,241.93 Future Value = $220,000 Interest Rate = 10% Periodic Payment = $4,000

Q: An investment promises to pay into an account that pays you 6 percent annually, $150 per month for…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Your brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today…

A: Future value is the value of the current assets or some amount that is invested today and amount…

Q: Suppose you have the opportunity to make an investment in a real estate venture that expects to pay…

A: Present value of annuity = P * {1-[1/(1+r)^n]/r} Where, P =Periodic Payment i.e. 750 r =rate of…

Q: Roland just put RM1,000 in the fixed deposit and intend to leave it there for 10 years. If the bank…

A: Investment amount = RM 1,000 Annual interest rate = 16% Semi annual interest rate = 16%/2 = 8%…

Q: You have just deposited $9,500 into an account that promises to pay you an annual interest rate of…

A: GOAL (FV) 27940 INTEREST RATE 6.20% YEARS 8+12=20 PMT 0 PV 9500

Q: Imagine that you deposit \$6,000$6,000 a year, starting one year from today, for four years into a…

A: We need to use future value of ordinary annuity(payment due at end of period) formula to get money…

Q: How many years will it take to reach your goal?

A: Year Opening Balance ($) Interest % Interest Amount ($) Additional Deposit ($) Balance at year end…

Q: If you invest $2,000 today, withdraw $1,000 in 3 years, deposit $3,000 in 5 years, deposit $1,500 in…

A: Given, The amount invested today is $2000 The rate of interest is 7%

Q: 35. Upland Family Practice Center plans to invest $60,000 in a money market account at the beginning…

A: 3This question is based on annuity due concept where the cashflow stream starts at beginning of each…

Q: A. You are offered an investment that will pay you $200 in one year, $400 the next year, $600 the…

A: The present value is today's value of future cash flows. It represents the discounted value of cash…

Q: A person wants to make two individual investments, one today and one in six months at a rate of 18%…

A: monthly rate = 18%/12 = 1.5% X * 1.01512 + 5,000,000*1.0156 = 10,000,000 X = 3,791,163.26

Q: Suppose you have the opportunity to make an investment in a real estate venture that expects to pay…

A: The concept that helps to evaluate the future or present value of the cash flow is term as the time…

Q: You would like to have $59,000 in 5 years for the down payment on a new house following graduation…

A: Future Value= $59,000; No. of periods= 5*4= 20 years, Interest rate per period = 4.24/4=…

Q: If you deposit $3,500today into an account earning an annual rate of return of 11percent, what…

A: Rate of return (r) = 0.11 or 11% Initial deposit (I) = $3,500 Future value (FV) = ? Future value…

Q: Assume you deposit $5700 at the end of each year into an account paying 11.25 percent interest.…

A: Given: Deposit = $5,700 Interest rate = 11.25% Future value= ?

Q: An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at…

A: Question 1 is the case of ordinary annuity while question 2 is the case of an annuity due as the…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Present value shall be computed by discounting the cash flows at the required rate. Future value…

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Time value of money techniques helps us to find the values of the deposits at different time…

Q: Karen wants to have $22,559 in her investment account in 5 years. If her bank offers an annual…

A: Following details are given in the question : Future value = $22559 Time period = 5 years Interest…

Q: You have just received a windfall from an investment you made in a friend's business. He will be…

A: Money’s value declines with the passage of time due to various market factors like inflation rate.…

Q: You have $9,259.70 in a brokerage account, and you plan to deposit an additional $5,000 at the end…

A: Given: Rate = 13% PMT = -6000 Present value = -$9,259.70 Future value = $260,000

Q: An investment promises to pay $5,000 at the end of each year for the next four years and $3,000 at…

A: Annuity payment is the series payment of a certain amount for a particular period of time. Under…

Q: Greg wants to have $50 000 in five years. He has $20 000 today to invest. The bank is offering five-…

A: here we need to find the interest rate.wherein we have been given the future value and present…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Present Value is the current value of the future stream of cash flows discounted at the specified…

Q: Ken Francis is offered the possibility of investing $2,745 today; in return, he would receive…

A: Interest rate: It can be defined as the percent of the principal loan balance, charged by the lender…

Q: An investor deposits $100 into his credit union account that pays interest at the rate of 3.25% per…

A: Future Value = Present Value * (1+interest %)^N Future Value = 100*(1.0325)^7 Future Value =…

Q: Suppose Jennifer deposits $500 in an account at the end of this year. $400 at the end of the next…

A: We need to use compound interest formula to solve this problem A =P(1+i)n Where A= final payment…

Q: Sidney makes 10 annual deposits of 5,500 each into an investment account. The interest rate is 6%…

A: Investments are the ways through which money is saved in various financial instruments and accounts…

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: Year 1 Cash flow = $26016 Year 2 Cash flow = $52032 Year 3 Cash flow = $78048 Interest rate = 0.114…

Q: An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at…

A: In the given case, an investment will pay $7,000 at the end of each year for the next six years and…

Q: Your brother has asked you to help him with choosing an investment. He has $7,700 to invest today…

A: Future value represents the value of the investment in the future date of the company.

Q: How much will your investment be worth eight years from now? Can the excel and calculator solutions…

A: Information Provided: Interest rate = 6.5% Amount to be received (Year 2) = $5000 Term = 10 years

Q: Assuming that a $45,000 shop loan is financed at 12% over 4 years, what is the monthly shop payment?…

A: 2. Loan amount = $45000 Interest -12% Period = 4 years Amount (A) = P* [i *…

Question

28. Your brother has asked you to help him with choosing
an investment. He has $5,200 to invest today for a period of
five years. You identify a bank CD that pays an interest rate
of 3.60 percent with the interest being paid quarterly. What
will be the value of the investment in five years?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction to question:

VIEW

Step 2: Calculation of future value of investment:

VIEW

Step 3: Calculation of future value of investment without financial calculator:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?