(Related to Checkpoint 5.4) (Present value) Sarah Wiggum would like to make a single investment and have $1.5 million at the time of her retirement in 26 years. She has found a mutual fund that will earn 8 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 18 percent, how soon could she then retire? a. If Sarah can earn 8 percent annually for the next 26 years, the amount of money she will have to invest today is $ (Round to the nearest cent.)

(Related to Checkpoint 5.4) (Present value) Sarah Wiggum would like to make a single investment and have $1.5 million at the time of her retirement in 26 years. She has found a mutual fund that will earn 8 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 18 percent, how soon could she then retire? a. If Sarah can earn 8 percent annually for the next 26 years, the amount of money she will have to invest today is $ (Round to the nearest cent.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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Similar questions

If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
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