Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 4, Problem 24QP
LO2 24. Calculating Present Values. You need $85,000 in 10 years. If you can earn .65 percent per month, how much will you have to deposit today?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
You want to save $800 a month for the next 30 years and hope to earn an average rate of return of 12 percent. How much money will you have after 30 years if you invest your money at the end of each month?
$2,795,971.31
$2,681,482.99
$2,823,931.02
$2,523,930.30
5) Suppose you will need $12,000 in 3 years. How much must you invest per month in order to have $12,000 if money earns an annual rate 6% compounded monthly?
Use excel
6. You decide you want to start investing for your retirement and you want to have $650,000. If you save $100 a month in an account that averages a 10% annual rate of return, will you have enough money in 25 years? (Hint: this formula was introduced in Section 1)
Chapter 4 Solutions
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 4.1 - Prob. 4.1ACQCh. 4.1 - Prob. 4.1BCQCh. 4.1 - In general, what is the future value of 1 invested...Ch. 4.2 - What do we mean by the present value of an...Ch. 4.2 - Prob. 4.2BCQCh. 4.2 - Prob. 4.2CCQCh. 4.2 - Prob. 4.2DCQCh. 4.3 - What is the basic present value equation?Ch. 4.3 - Prob. 4.3BCQCh. 4 - If you invest 500 for one year at a rate of 8...
Ch. 4 - Prob. 4.2CCh. 4 - Suppose you invest 100 now and receive 259.37 in...Ch. 4 - Prob. 1CTCRCh. 4 - Prob. 2CTCRCh. 4 - Prob. 3CTCRCh. 4 - Prob. 4CTCRCh. 4 - Prob. 5CTCRCh. 4 - Prob. 6CTCRCh. 4 - Prob. 7CTCRCh. 4 - Prob. 8CTCRCh. 4 - Prob. 9CTCRCh. 4 - Prob. 10CTCRCh. 4 - Prob. 1QPCh. 4 - Prob. 2QPCh. 4 - Prob. 3QPCh. 4 - Prob. 4QPCh. 4 - Prob. 5QPCh. 4 - Calculating Rates of Return. Assume the total cost...Ch. 4 - Calculating the Number of Periods. At 4.7 percent...Ch. 4 - Calculating Rates of Return. In 2014, an 1874 20...Ch. 4 - Prob. 9QPCh. 4 - Prob. 10QPCh. 4 - Calculating Present Values. You have just received...Ch. 4 - Prob. 12QPCh. 4 - Prob. 13QPCh. 4 - Prob. 14QPCh. 4 - Calculating Rates of Return. Although appealing to...Ch. 4 - Prob. 16QPCh. 4 - Prob. 17QPCh. 4 - Calculating Future Values. You have just made your...Ch. 4 - Calculating Future Values. You are scheduled to...Ch. 4 - Calculating the Number of Periods. You expect to...Ch. 4 - Calculating Future Values. You have 6,150 to...Ch. 4 - Prob. 22QPCh. 4 - Calculating the Number of Periods. You can earn...Ch. 4 - LO2 24. Calculating Present Values. You need...Ch. 4 - Prob. 25QPCh. 4 - Calculating Future Values. You have 20,000 you...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?arrow_forward33.If money is worth 12% compounded monthly, how much must an investor save monthly to accumulate P200,000 in two years?arrow_forwardYou want to have $3.5 million in real dollars in an account when you retire in 50 years. The nominal return on your investment is 8 percent and the inflation rate is 3.5 percent. What real amount must you deposit each year to achieve your goal? A. $20,569.90 B. $6,100.00 C. $21,598.40 D. $21,392.70 E. $19,541.41arrow_forward
- You are investing $25,000 for 10 years at 10%. How much more money would you have with monthly compounding than you would with annual compounding? O $2,832.48 O $2,500.00 O $162.85 O 896.24arrow_forward12. If John wants to have $35,000 in 9 years, how much should he invest today in an account that pays 8% interest compounded annually?arrow_forward6. You are considering an investment that will pay you $1,000 in one year, $2,mm in two years, and $3,000 in three years. If you want to earn 10% on yourmoney, how much would you be willing to pay?arrow_forward
- 1.) Starting with $15,000, how much will you have in 10 years if you can earn 6 percent on your money? 2.) If you can earn only 4 percent? If the average new home costs $275,000 today, how much will it cost in 10 years if the price increases by 5 percent each year? 3.) If you can earn 4 percent, how much will you have to save each year if you want to retire in 35 years with $1 million?arrow_forwardHow much would you be willing to pay today for an investment that will pay you $2,500,000 in 30 years, assuming your discount rate is 14.25%.arrow_forward3. A man desires to have P3M money in his savings when he retires after 25years. This has amount in the present purchasing power. If the expected averageinflation rate is 7% per year and the savings earns 5.5%, what lump sum ofmoney should he invest now?arrow_forward
- 2 a) Suppose you receive $10,000 and have an opportunity to earn a real rate of return of 10% (assume known and constant forever). Using the definition of income proposed by John Hicks, what is your annual sustainable income? In other words, what amount can you spend every year forever? b) What is the present value of an annual payment of $10,000 forever, assuming a 5% real discount rate? $9,523.80 $200,000 Infinite $10,000arrow_forward9) If you have $1,000 today and want to invest it at 7% per year, how much will you have after 12 years? A) $3,863.49 B) $2,252.19 C) $1,070.00 D) none of the abovearrow_forward9. How long does it take for your money to grow to ten times its original value if the interest rate of 5% per year? Use excel.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegePFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
PFIN (with PFIN Online, 1 term (6 months) Printed...
Finance
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
What is an Annuity? Are Annuities a Good Investment? Basics of an Annuity, a Whiteboard Animation; Author: Learn to invest;https://www.youtube.com/watch?v=Wq7nq8Gx78w;License: Standard YouTube License, CC-BY