3) Tired of being broke: Suppose your client "wants" to deposit $10,000 into a bank that pays them 2.5% compounded quarterly. Calculate what the bank will owe them at the end of each year for five years. Also, explain to your client how this process works and whether or not this investment will be a worthwhile investment. Show all the work!

3) Tired of being broke: Suppose your client "wants" to deposit $10,000 into a bank that pays them 2.5% compounded quarterly. Calculate what the bank will owe them at the end of each year for five years. Also, explain to your client how this process works and whether or not this investment will be a worthwhile investment. Show all the work!

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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7. You plan to save every year and accumulate $150,000 in 6 years to make the down payment for your house. To achieve your financial goal, you plan to make a deposit of $20,000 per year into a bank account paying 6% annual interest. The first deposit will be made a year from today. a. Draw a timeline to visualize the problem. b. Can you achieve your financial goal? (Show your work to answer this question) c. If not, what is the minimum deposit you need to make per year in order to achive your goal? 8. You are pursuing a Bachelor's in Finance at a business school, and you will need $20,000 per year for the next 4 years to cover your college expenses. That is, you plan to withdraw $20,000 at the end each of the next 4 years, starting one year from today. To support your college education, your parents decide to make a deposit today into a bank account paying an 8% annual interest. This deposit should be sufficient to cover the four $20,000 withdrawals you will make over the next 4 years.…
1. You deposit GHS10,000 today into an account paying 6% annual interest and leave it on deposit for exactly eight years. Required: How much will be the amount in the account at the end of eight years if interest is compounded annually? 2. Imagine you are a professional personal finance planner. One of your clients ask you the following question. Use time value of money technique to develop appropriate responses in each question. I borrowed GHS75,000, am required to repay it in six equal (annual) end of year instalments of GHS3,344 and want to know what interest rate I am paying.
What is the excel function and formula for this question? Off-The-Books Investment Firm, LLC, has offered you an investment it says will return to you $20,000 in 2 years. To get in, you'll need to make a $10,000 deposit to their receivables account and promise not to tell anyone about it. What is the annual return on this investment?
Suppose you invest $130 a month for 5 years into an account earning 8% compounded monthly. After 5 years, you leave the money, without making additional deposits, in the account for another 29 years. How much will younhave in the end? Suppose instead you didn't invest anything for the first 5 years, then deposited $130 a month for 29 years into an account earning 8% compounded monthly. How much will you have in the end? Question Help: D Video Submit Question
Assume that you have $10,000,000 in your bank account. You wish to withdraw $400,000 per year, at the end of each year, for the next 5 years, after which you wish to have $11,000,000 in the bank. What is the balance in your account after the 2nd year (after the withdrawal)? Hint: you will need first to solve for rate in Excel given all other parameters. Watch signs. Select one: a. $10,366,644 b. $10,600,000 c. $9,600,000 d. $10,488,912
Suppose you want to withdraw $20,000 at the end of year 3 and another $20,000 at the end of year 5. The account's interest rate is 5% compounded annually. A How much should you deposit now? B) Suppose you realize you can only deposit $10,000 today, but you expect to have more funds available in 1 year. How much must you deposit into the account at the end of year 1 so that you can still make the necessary withdrawals at the end of years 3 and 5?
Please provide the steps to solving this problem using a financial calculator: You just opened a brokerage account, depositing $3,500. You expect the account to earn an interest rate of 9.652%. You also plan on depositing $4,500 at the end of years 5 through 10. What will be the value of the account at the end of 20 years, assuming you earn your expected rate of return?
Think about the cash flows associated with putting in the bank for five years, assuming you draw out the interest each year and then close the account. Now think about a set of hypothetical cash flows associated with putting the same money in a business, operating for five years, and then selling out. Write an explanation of why the IRR on the business project is like the bank’s interest rate. How are the investments different?
2. (From section 6.2) You want to be able to withdraw $50,100 from your account each year for 20 years after you retire. You expect to retire in 35 years. If your investment account earns 5.5% interest, how much will you need to deposit into the account at the end of each year until you reach retirement to achieve your retirement goals? (a) The first part is finding how much we need to have in the account by the time we retire. Which formula will you use first? Circle one. Annuity Payout-Annuity (b) What are the following variables that we will need for the formula? PMT = n = t = r = A or Po = (c) Write the formula you will use with the numbers plugged in below. (d) Solve using your calculator or technology and round to two decimal places. Work is not required here. Write the answer here and state which variable you solved for. (e) Using your own words, describe what you found by solving the equation in terms of the word problem given.
Please use Excel to Solve Future value: Your birthday is next week and instead of other presents, your parents promised to give you $1,000 in cash. Since you have a part-time job and, thus, don't need the cash immediately, you decide to invest the money in a bank CD that pays 5.2 percent, compounded quarterly, for the next two years. How much money can you expect to earn in this period of time?
You plan to deposit $700 in a bank account now and $200 at the end of one year. If the account earns 3% interest per year, what will the balance be in the account right after you make the second deposit? There will be $ in the account right after the second deposit. (Type an integer or a decimal.) w an example .... Get more help. Save Clear all In
There is an investor stating they will pay out $84,000 at the end of 4 years. In order to invest into the opportunity, you'll need to make a deposit of $10,000 to thier indicated bank account. What is the average annaul return rate. Use excel functions to indicate your steps.

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