Bank ZLX is marketing their new fund by noting that a fixed $320 monthly deposit in their fund should be expected to net $1,900,000 in 35 years. Assume the first deposit is made at the end of this month. What effective annual rate (EAR) is Bank ZLX expecting their new fund to return?
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Bank ZLX is marketing their new fund by noting that a fixed $320 monthly deposit in their fund should be expected to net $1,900,000 in 35 years. Assume the first deposit is made at the end of this month. What effective annual rate (EAR) is Bank ZLX expecting their new fund to return?
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- If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32 are made starting on December 31, 2020, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?A pension fund is making an investment of $100,000 today and expects to receive $1,600 at the end of each month for the next five years. At the end of the fifth year, the capital investment of $100,000 will be returned. What is the internal rate of return compounded annually on this investment?Sevim wants to create a savings of 95,000 TL at the end of 30 years. For this purpose, it plans to continue its investment by adding 120 TL to the bank at the end of each month for the first 120 months, and 120 TL + X TL for the remaining period. Calculate the value that X will receive under the assumption that the fund in which Sevim invests has an annual effective interest rate of 4.2%.
- An investor needs $22,000 in 11 years. (a) What amount should be deposited in a fund at the end of each quarter at 5% compounded quarterly so that there will be enough money in the fund? (b) Find the investor's quarterly deposit if the money is deposited at 4.2% compounded quarterly. (a) The deposit should be $. (Round to the nearest cent as needed.)How much should SKF Steel Company invest in a fund to be able to withdraw $10,000 at the end of every 3 months for five years? The money in the fund is expected to grow at 4% compounded quarterly for the first two years, and 6% compounded quarterly for the next three yearsA pension fund projects its cash flow obligations to be constant at $5MIn for the next 10 years and then grow by 5% in perpetuity starting year 11. Assume that interest rates are constant at 4% for the next ten years and will then increase to 6% from year 11 onwards. Determine the present value of the pension fund obligations. (Hint: You may want to divide the cash flows into the annuity and the growing perpetuity component.)
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