
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Enrique already knows that he will have $300,000 when he retires. If he sets up a payout
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- To ensure his retirement income, a 40-year old man plans to purchase annuity when he turns 65. The annuity will pay $7,500 at the end of each month for 20 years, and the value is calculated at 5% interest, compounding monthly. To pay for this annuity, he starts making annual level deposits in a mutual fund, which earns 8% interest each year. He makes the first one right away, and makes deposits at the beginning of each year for 25 years. How much does he need to deposit each year in order to save enough to buy his annuity?arrow_forwardEd Long promised to pay his son $300 semiannually for 10 years. Assume Ed can invest his money at 6% in an ordinary annuity. How much must Ed invest today to pay his son $300 semiannually for 10 years?arrow_forwardLisa expects to retire in 21 years, and she expects to live 30 years after she retires. Lisa would like to have $60K available at the beginning of each year of her retirement. How much would Lisa need to deposit at the end of each of the next 12 years in order for her to reach her retirement objective? The deposits will be made into an account that earns 10% interest.arrow_forward
- Reuben has decided to invest to help with his retirement savings. How much would he have to invest to have $113,400 after 19 years, assuming an interest rate of 3.43% compounded quarterly?arrow_forwardBob purchases an annuity that will pay him $10,000 a year for the next 15 years starting a year from now. Assuming a 5% annual interest rate, what is the value of this annuity? Choose the closes. a) $150,000 b) $103,797 c) $124,622 d) $77,217arrow_forwardBrian would like to accumulate $130,000 for his retirement in 9 years. If he is promised a rate of 4.32% compounded semi-annually by his local bank, how much should he invest today? Round to the nearest centarrow_forward
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