Answered: You are expecting to have a child one…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 11PROB

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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
what effective annual rate of return would rayne need to earn if she deposits 1,000 per month into an account beginning one month from today in order to have a total of 1000000 in 30 years?
Ray wants to buy his son a car for his P21st birthday. If Ray’s son is turning 16 today, and interest is 8% per annum, compounded semi-annually, what would Ray’s semiannual investment need to be if the car will cost P26,000 and the first payment is made six months from today?
What effective annual rate of return (EAR) would Rayne need to earn if she deposits R1,000 per month into an account beginning one month from today in order to have a total of R1,000,000 in 30 years?
If you invest $11750 in an RESP for your child when they are 5, how long will it withstand quarterly withdrawals of $1200, assuming 5.4% compounded annually and they make their first withdrawal on their 18th birthday.
Suppose you wish to invest in an annuity so that you will have $120,000 at some future date for your child’s education. You call several institutions and find that the best interest rate is 5.85% compounded monthly. In addition, you wish to make $350 monthly installments, with payments made at the end of each period. If you expect to attain this goal and give your child the $120,000 by his/her 18th birthday, about how long after he/she is born do you need to start investing in the annuity? Type an explanation and/or the calculations used to arrive at your answer. Construct the payment schedule for the first 6 payments by filling in the table below: period interest cum. int. principal balance 0 1 2 3 4 5 6
You estimate that you will need $15,000 in four years (four years from now) to get married. If the interest rate is 5% annually, how much do you need to put in an account today (now), so that you will have $15,000 in four years’ time?
Karen wants to have $22,011 in her investment account in 6 years. If her bank offers an annual compound interest rate of 2% with monthly compounding, how much should she deposit today?
Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants to have $50,000. What annual interest rate would he need in order to make that happen?
Angel is being promised by Peter to receive P30,000 every four months for two years. The interest rate is 12% per annum. How much is the value of the amount of money promised by Peter today?
When your uncle started work on his twenty-first birthday, he decided to invest money each month with the objective of becoming a millionaire by the time he reaches age 61 . If he expects his investments to yield 2% per annum, compounded monthly, how much should he invest each month?
Abby has decided to invest $60 at the end of each month into a retirement plan that has an annual rate of 4.6%, compounded monthly. If Abby continues her investments for a period of 8 years, how much money will she have in the plan?

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You are expecting to have a child one year from now. If you were guaranteed 12% interest compounded quarterly, how much would you have to save per month to amount P200,000 by the time the child is 18?