Carol Markle and Prince Steven plan to invest $7,000 a year in an educational IRA for their daughter, Lilibet. They will make thesedeposits on December 31 of each year. Carol and Steven feel they can safely earn 10%. How much will be in this account on December31 of the 18th year? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimalplaces, eg. 52.75)Click here to view Table 2.Amount on December 31 $

Given information, Annual investment payment (PMT) = $7,000Annual interest rate (r) = 10% or…

Answered: Carol Markle and Prince Steven plan to…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Compute the value for each of the following independent situations. Note: Use Excel or a financial calculator. Round your answers to 2 decimal places. 1. To save for their new child's college education, a couple places $25,000 in an account. What amount will accumulate in the account at the end of 18 years, assuming an interest rate of 7.25% compounded annually? 2. An individual has just inherited a piece of land. The individual plans to hold the land for three years and then expects the land to sell for $200,000. What is the value today of inheriting the land, assuming an interest rate of 8.5% compounded annually? 3. To save money for the down payment on a house, an individual places $5,000 in an account at the end of each quarter. What amount will accumulate in the account at the end of four years, assuming an interest rate of 9.75% compounded quarterly? 4. To purchase a car, an individual agrees to pay $800 at the end of each month for the next six years. What is the cost of the car…
Mary Cooper, Sheldon's mother, who lives in east Texas, wants to help pay for her grandchild's education. How long will it take Mary to reach her goal of $295,000 if she invests $10,000 per year, earning 6 percent? Use Appendix A-3 or the Garman/Forgue companion website. Round your answer to the nearest half-year. years
Aiden starts a retirement fund 10 years before retirement. He pays $100 per month into the annuity for 10 years with an interest rate of 5% per year compounded monthly. Find the value of Aiden's annuity at the time of retirement. Use a TVM solver to solve this problem. Fill in the information that you typed into the TVM solver. Round the final answer to two decimal places. 120 IN = I%= 5 PV = 0 PMT= -100 Final Answer: $ 17,537.13 FV = P/Y = C/Y = PMT: (End/Begin) End✔ alpha 12 12 X ✓ B✓
Alec, Daniel, William, and Stephen decide today to save for retirement. Each person wants to retire by age 68 and puts $9,300 into an account earning 8% compounded annually. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) Required:Calculate how much each person will have accumulated by the age of 68. Person Age Initial Investment Accumulated Investment by Retirement (age 68) Alec 58 $9,300 Daniel 48 9,300 William 38 9,300 Stephen 28 9,300
Gilberto opened a savings account for his daughter and deposited $1000 on the day she was born. Each year on her birthday, he deposited another $1000. If the account pays 11% interest, compounded annually, how much is in the account at the end of the day on her 12th birthday? At the end of the day on her 12th birthday, the amount in the account is $ (Simplify your answer. Type an integer or a decimal. Round to the nearest cent if needed.)
Kevin is planning for his retirement this year. One option that has been presented to him is the purchase of an annuity that would provide a $45,000 payment each year for the next 12 years. Click here to view the factor table. Calculate how much Kevin should be willing to pay for the annuity if he can invest his funds at 13%. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Payment
You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 25 and make the contributions for 15 years. Your twin sister does the same starting at age 40 and makes the contributions for 25 years. Both of you earn 6 percent annually on your investment. What amounts will you and your sister have at age 65? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar. Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 65? Select the larger amount.
A couple plans to save for their child's college education. What principal must be deposited by the parents when their child is born to have $42,000 when the child reaches the age of 18? Assume the money earns 8% interest compounded quarterly. Round your answer to two decimal places.)
You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 10 years. Your twin sister does the same starting at age 45 and makes the contributions for 20 years. Both of you earn 8 percent annually on your investment. What amounts will you and your sister have at age 65? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.
Your grandfather is retiring at the end of next year. He would like to ensure that his heirs receive payments of $11,600 a year forever, starting when he retires. If he can earn 12.0 percent annually, how much does your grandfather need to invest to produce the desired cash flow? (Round answer to 2 decimal places e.g. 15.25.)
A couple thinking about retirement decide to put aside $3,900 each year in a savings plan that earns 8% interest. In 5 years they will receive a gift of $19,000 that also can be invested. a. How much money will they have accumulated 30 years from now? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. If their goal is to retire with $890,000 of savings, how much extra do they need to save every year? Note: Do not round intermediate calculations. Round your answer to 2 decimal places need both parts,,,,attempt if you will solve both parts....thanks
A couple thinking about retirement decide to put aside $12,500 each year in a savings plan that earns 7.50% interest. In 9 years they will receive a gift of $89,500 that also can be invested. a. How much money will they have accumulated 27 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Accumulated savings $ b. If their goal is to retire with $1,648,383 of savings, how much extra do they need to save every year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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