Alberto's bank guarantees him a return rate of 7.40% in year 2031, 8.40% in year 2032, 4.20% in year 2033 and 6.20 % in year 2034. If he deposits $10,000 at the end of year 2031 and $24.500 at the end of year 2032, how much will he have in his savings account at the beginning of year 2034? $33,141.85 O $39.107.39 $36,824.28 $38,200.16 $37,085.04
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- Q) At the end of year 5 Joe starts to withdraw $14500 from his savings account. If he takes out the same amount each year and the interest rate is 14%, what was Joe's initial investment assuming the account will be depleted at the end of year 25 Solve on the white paper onlys.Q1:If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years Q2:What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually Q3:Your parents will retire in 18 years. They currently have $250,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Q4:If you deposit money today in an account that pays 6.5% annual interest, how long will it take to double your money?Q4) You have $10,000 in your bank account today and you wish to start saving for your first car, estimated to cost $17,180 in 8 years’ time. Calculate the interest rate you would need for your savings to compound.
- 02a) Why is wealth maximization considered as a better measure than profit maximization? b) You are going to deposit in saving account Tk. 3,00,000 today. You will receive Tk.4,80,000 from the bank at the end of year 7. What will be the rate of interest of yourdeposit? c) Mr. Kobir has been offered to deposit of Tk. 10000 today with an interest rate of 12%.Calculate the value on this opportunity after 5 years, if the interest rate is:(i) Compounded Semi-Annually.(ii) Compounded Monthly. d) Gabrielle just won Tk. 10,00,000 in the state lottery. She is given the option of receivingeither alternative A or B shown in the following table at the end of each of the next 5years. She decides to choose the payment alternative—annuity or the mixed stream ofpayments— that provides the higher future value at the end of 5 years. If Gabrielle canearn 5% annually on her investments, which option should she take? End of year Cash flow stream…8) Special Retirement PlanYou set up a retirement plan where you will invest $20,000 per year in an account with a guaranteed rate of return of ? = 0.05. The plan requires that you start investing immediately at year t=0, and make fifteen (15) additional payments of $20,000 in years t=1, t=2, ..., t=10. You make 11 investments in total. a. What will be the value of this stream of investments in year t=50? b. What is the maximum you can withdraw per year over the twenty (20) year period from t=51, t=52, ..., t=70? You have to withdraw the same amount each year. c. What is the maximum that you can withdraw per year forever if you start to make withdrawals in year t=51. You have to withdraw the same amount each year. 19)5. Present value To find the present value of a cash flow expected to be paid or received in the future, you will the future value cash flow by (1+1)N What is the value today of a $42, 000 cash flow expected to be received 17 years from now based on an annual interest rate of 7% ? $13,296 $10,637 $132, 670 $20, 609 Your broker called carfier today and offered you the opportunity to invest in a security. As a friend, he suggested that you compare the current, or present value, cost of the security and the discounted value of its expected future cash flows before deciding whether or not to invest. The decision rule that should be used to decide whether or not to invest should be. Everything else being equal, you should invest if the discounted value of the security's expected future cash flows is greater than or equal to the current cost of the security. Everything else being equal, you should invest if the current cost of the security is greater than the present value of the security's…
- Question 9 Suppose you need to accumulate GHȼ100,000 in 10 years. You plan to make a deposit in a bank now, at Time 0, and then make 9 more deposits at the beginning of each of the following 9 years, for a total of 10 deposits. The bank pays 6% interest, you expect inflation to be 2% per year, and you plan to increase your annual deposits at the inflation rate. How much must you deposit initially?You decide to deposit your money today in a bank account paying 6.30% interest, compounded monthly. If the value of your savings grows to $3, 800 in 10 years, how much did you deposit? Answer a. $1,826 b. $ 2,027 c. $2,193 d. $1,988 e. $1,9077. Calculateannuity cash flows Your goal is to have $10,000 in your bank account by the end of twelve years. If the interest rate remains constant at 9% and you want to make annual identical deposits, what amount will you have to deposit into your account at the end of each year to reach your goal? $496.51 $397.21 $446.86 $595.81 If your deposits were made at the beginning of each year rather than an at the end, what is the amount your deposit would change by if you still wanted to reach your financial goal by the end of twelve years? $34.85 $30.75 $55.35 $41.00
- 5. You decide to invest $100 into a savings account with an interest rate of 2% annually in2015. The amount of money in your savings account in a given year can be modeled by the following function. P(t)=100(10)^.009 a. Evaluate P(0) and explain what it means in this context. b. Approximately how many years will it take for the amount of money in your bank account to reach $120? c. What year will you have $120 in your savings account?A3) Finance Ahmad deposits $1,200 in her bank today. If the bank pays 4 percent simple interest, how much money will she have at the end of five years? What if the bank pays compound interest? How much of the earnings will be interest on interestPLEASE ANSWER THESE 2 QUESTIONS. THANKYOU BARTLEBY. 11. What will be the future worth of money after 12 months, if the sum P25,000.00 is invested today at a simple interest rate of 1% per year? 12. If you borrowed P 10,000.00 from a bank with 8% interest per annum, what is the total amount to be repaid at the end of one year?