Bobby receives alimony payments every 6 months and the next payment is tomorrow. Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much money should Bobby put away into an investment each time he receives alimony payments if he can get a 8% return a year?
Bobby receives alimony payments every 6 months and the next payment is tomorrow. Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much money should Bobby put away into an investment each time he receives alimony payments if he can get a 8% return a year?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Use the table below to answer the following
questions:
Period
4
567
8
9
10
11
Present Value of an Annuity of 1
4%
Future Value of an Annuity of 1
5%
5%
8%
10%
4%
8%
10%
3.6299
3.5460 3.3121 3.1699 4.2465 4.3101 4.5061 4.6410
4.4518 4.3295 3.9927 3.7908 5.4163 5.5256 5.8666 6.1051
5.2421 5.0757 4.6229 4.3553 6.6330 6.8019 7.3359 7.7156
6.0021 5.7864 5.2064 4.8684 7.8983 8.1420 8.9228 9.4872
5.7466 5.3349 9.2142 9.5491 10.6366 11.4359
7.4353 7.1078 6.2469 5.7590 10.5828 11.0266 12.4876 13.5795
8.1109 7.7217 6.7101 6.1446 12.0061 12.5779 14.4866 15.9374
8.7605 8.3064 7.1390 6.4951 13.4864 14.2068 16.6455 18.5312
6.7327
6.4632
Bobby receives alimony payments every 6 months and the next payment is tomorrow.
Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much
money should Bobby put away into an investment each time he receives alimony
payments if he can get a 8% return a year?
$35,593
O $31,624
O $23,131
O $46,262
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