Albert is planning to invest Php570 in a mutual fund at the end of each of the next eight years. If his opportunity cost rate is 6 percent compounded annually, how much will his investment be worth after the last annuity payment is made?

Albert is planning to invest Php570 in a mutual fund at the end of each of the next eight years. If his opportunity cost rate is 6 percent compounded annually, how much will his investment be worth after the last annuity payment is made?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 25P

See similar textbooks

Related questions

Q: Juan invested $10,500 into a fund earning 7.50% compounded monthly. She plans to withdraw $700 from…

A: Working note for calculations. Note for Converting Quarter into years:- Number of year to deplete =…

Q: Abby has decided to invest $60 at the end of each month into a retirement plan that has an annual…

A: Computation of the money that will be saved by Abby at the completion of 8 years is shown:

Q: An engineer will deposit 10% of her salary each year into a retirement fund. If her current annual…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: today

A: Formula to calculate FV of annuity: If payment done at the beginning of the year: FV =…

Q: Mr. Jones will invests P 5,000 in a fund at the end of each 6 months to accumulate P 100,000 to buy…

A: Compounding of interest means, interest is received on principal as well as the earned interest…

Q: Mr. Hopper expects to retire in 30 years, and he wishes to accumulate $750,000 in his retirement…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Crystal Nelson is 30 years old and she invests $3,300 in an annuity, earning a 8% compound annual…

A: PV = 0 N = 21 rate = 8% PMT = 3300 use FV function in Excel with type as 1

Q: If Luis Jimenez makes annual deposits of $1,000 into a savings account for 30 years, how much will…

A: Interest charged on the principal amount and the interest accrued is known as Compound Interest. It…

Q: Brenda expects to receives Sh.50,000 at the end of each year for 5 years in a fund earning 10% per…

A: The present value of an annuity is a series of payments or receipts lasting for some specific…

Q: Metaz is planning to invest OMR 3500 every year for the next six years in an investment paying 12…

A: Here, Annual Payment is OMR 3,500 Interest Rate is 12% Time Period is 6 years

Q: how much will be in the account at the end of the 20years?

A: Future Value: It is the future worth of the present annual cash flow stream and is computed by…

Q: Donald will receive $450,000 from his trust fund in 20 years from today. He assumes he could get a…

Q: William Jack and Sophia Rose are planning on their first child education. If they expect that…

A: College cost after 18 years = RM 150000 Number of deposits (n) = 18 r = 6% Let the annual deposit =…

Q: Jami Minard wants to receive an annuity of $8,000 at the beginning of each year for the next 10…

A: Annuity refers to a contract between an individual and an insurance company under which a desired…

Q: Ginger Rogers deposits $3,000 a year into her retirement account. If these funds have an average…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Hannah plans to invest $6,500 at the end of each year for the next eight years. Assuming a 10%…

A: The amount which represents the value of investment after a specified period is known as future…

Q: Beginning a year from now, Bernardo O’Reilly will receive $20,000 a year from his pension fund.…

A: Present value is the current worth of future payments from the specific investment.…

Q: An engineer planning for her retirement will deposit 15% of her salary each year into a stock fund.…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: Joe would like to have $80,000 saved in 10 years. If he invests his money in an ordinary annuity…

A: Future value of annuity = P * [ (1+r)^n - 1 ] /r FV = $80,000 n = no. of compounding period 10*12…

Q: Anuonyam plans to deposit GH¢80 in an account at the end of each of the next 20 years. If the…

A: Honor code: Hi, there, Thanks for posting the question. As per our Q&A honor code, we must…

Q: Enrique already knows that he will have $300,000 when he retires. If he sets up a payout annuity for…

A: Given: Present value = $300,000 Interest rate = 4.55% Year = 15 Interest compounded = Quarterly

Q: Cameron is saving for his retirement 22 years from now by setting up a savings plan. He has set up a…

A: Time period till retirement is 22 years Quarterly saving of $97.00 Time period of saving is 12 years…

Q: Bo Newman will invest $10,000 today in a fund that earns 5% annual interest. How many years will it…

A: Time value of money: Time value of money is a vital concept to the investors, as it suggests them…

Q: receiving 25,000.00 pesos from his grandfather yearly and has decided to invest it next year to a…

A: The present value is value without interest and future value is value with interest. Can be found…

Q: Brandon is scheduled to receive payments of $1,200 each month for the next 2 years, with the first…

A: A payment (PMT) of $1200 is expected every month for 2 years or for (n) 24 months , which is then…

Q: Ted Houser wishes to accumulate a fund of $40,000 for the purchase of a house and lot. He plans to…

A: The computations as follows: While considering the table of future value of annuity, it can be…

Q: Starting on her 30th birthday, a woman will invest an amount every year on her birthday in an…

A: FVA FORMULA: FVA=A×1+RN-1R

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: Allen is planning for his retirement pension fund. He expects to receive £20,000 a year for 30 years…

A: Present Value can be calculated using PV function in excel PV (rate, nper, pmt, [Fv], [type])…

Q: Mr COVID is 25 years old and is planning to accumulate 10 million pesos on the day of his retirement…

A: Accumulation at retirement = 10,000,000 N = Number of withdrawals = 29 years and 6 months i.e. 354…

Q: Sally has decided to invest $70 at the end of each mouth into a retirement plan that has an annual…

A: Computation:

Q: Walt is evaluating an investment that will provide the following returns at the end of each of the…

A: Present Value is the current value of a cash flow that can be occurred in future. To find the…

Q: Franco plans to invest P1,500 in a mutual fund. If he earns 12% interest compounded monthly, to what…

A: Future value of annuity is referred as the value of group, which used to recur the payment in the…

Q: Maria Anguiano's current salary is $80,000 per year, and she is planning toretire 25 years from now.…

A: Future value is the value of the present cash flows after certain period. Due to interest that can…

Q: Fizal plan to invest RM2,000 in one of the Malaysian unit trusts each year for the next 18 years. He…

A: using excel FV function

Q: İhsan wants to pay the 50,000 TL loan he received from the bank in annual installments of 2,500 TL…

A: The loan refers to the fund provided by the lender to the borrower at a certain interest rate for a…

Q: Gregory's investment manager offers her an interest rate of 9.00% compounded monthly on her…

A: From the given data in the question, we have understood the future value of an ordinary annuity is…

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: If boo start investing P30,000 now in a trust fund that pays 4% compounded quarterly. How much money…

A: Use the Excel FV function with the following inputs to determine the value of investment. RATE = 1%…

Q: To ensure his retirement income, a 40-year old man plans to purchase annuity when he turns 65. The…

A: Monthly Annuity Payments = 7500 Time Period = 20 years * 12 = 240 months Interest % = 5%/12 End of…

Q: Sally Medavoy will invest $8,000 a year for 20 years in a fund that will earn 6% annual interest. If…

A: Annual investment = $8,000 Interest rate = 6% Number of years = 20 Future value of annuity when…

Q: Aunt Tillie has deposited $33,000 today in an account which will earn 10 percent annually. She plans…

A: We need to calculate future value of investment by using this formula FV = PV(1+i)n where FV =Future…

Q: Arnie agrees to contribute $2,300 to the road fund at the end of each year for the next 12 years.…

A: Calculation of amount should jack deposit to equal Arnie’s annual deposits: Answer: Jack should…

Q: A young couple wants to have a college fund that will pay $35,000 at the end of each half-year for 8…

A: Here, Required Amount in every six months for 8 years is $35,000 Interest Rate is 6% Time Period for…

Q: An investor is considering an investment that will pay $2,150 at the end of each year for the next…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Al Darby wants to withdraw $21400 (including principal) from an investment fund at the end of each…

A: In the given case, an amount of $ 21,400 will be withdrawn at the end of each year for next 5 years.…

Question

Video Video

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

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
Drake is planning to invest $570 in a mutual fund at the end of each of the next eight years. If his opportunity cost rate is 6 percent compounded annually how much will his investment be worth after the last annuity payment is made. a. 5980 b. 5642 c. 6062 d. 6222 e. 5055
Mr. Handsome would like to accumulate $1 million in his pension fund. If the annual interest rate is 12 percent, how long will it take Mr. Handsome to achieve the goal? (Assume that he will deposit the same amount of $300 each month into his pension fund, using monthly compounding.)
Mr. Areola is planning to make an additional investment at the end of each year for his retirement in 20 years. Mr. Areola plans to invest $5,000 each year for the first 5 years, $8,000 each year for the next 5 years, and $ 12,000 each year for the remaining 10 years. If the rate of return of 11 percent can be earned in these investments, how much money will Mr. Areola have at the end of 20 years?
Sally Medavoy will invest $8,000 a year for 20 years in a fund that will earn 6% annual interest. If the first payment into the fund occurs today, what amount will be in the fund in 20 years? If the first payment occurs at year-end, what amount will be in the fund in 20 years?
Mr. Hopper expects to retire in 30 years, and he wishes to accumulate $750,000 in his retirement fund by that time. If the interest rate is 10% per year, how much should Mr. Hopper put into his retirement fund each year in order to achieve this goal? (Assume that he makes payments at the end of each year.)
Beginning a year from now, Bernardo O’Reilly will receive $20,000 a year from his pension fund. There will be fifteen of these annual payments. What is the present value of these payments if a 6 percent annual interest rate is applied as the discount rate?
Gregory's investment manager offers her an interest rate of 9.00% compounded monthly on her investments. How much more money would she have to deposit at the end of every month for her fund to accumulate to $599,000.00 in 12 years if the interest rate was 9.00% compounded annually?
e) Fizal plan to invest RM2,000 in one of the Malaysian unit trusts each year for the next 18 years. He wants to know the effect of investing this money at the beginning of each year, rather than waiting until the end of each year. Calculate the difference in the future value of his investment in the next 15 years:i) if annual investment is at the end of each period;ii) if annual investment is at the beginning of each periodFor both cases, assume a 12 percent interest rate is applied.