Problem 6-32 Calculating Annuities [LO1] You are planning to save for retirement over the next 25 years. To do this, you will invest $760 per month in a stock account and $360 per month in a bond account. The return of the stock account is expected to be 9.6 percent, and the bond account will return 5.6 percent. When you retire, you will combine your money into an account with a return of 6.6 percent. How much can you withdraw each month from your account assuming a 20-year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Withdrawal

Problem 6-32 Calculating Annuities [LO1] You are planning to save for retirement over the next 25 years. To do this, you will invest $760 per month in a stock account and $360 per month in a bond account. The return of the stock account is expected to be 9.6 percent, and the bond account will return 5.6 percent. When you retire, you will combine your money into an account with a return of 6.6 percent. How much can you withdraw each month from your account assuming a 20-year withdrawal period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Withdrawal

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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Problem 6-7 Calculating Annuity Values [LO1] You plan to deposit $5,200 at the end of each of the next 25 years into an account paying 10.3 percent interest. a. How much money will you have in the account in 25 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 50 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) X Answer is not complete. a. Future value of 25 deposits b. Future value of 50 deposits $ 41,956.81 x
Problem 5-10 Calculating Perpetuity Values [LO 1] The Maybe Pay Life Insurance Company is trying to sell you an investment policy that will pay you and your heirs $29,000 per year forever. Assume the required return on this investment is 7.5 percent. How much will you pay for the policy? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Policy value today
A Question 11 You deposit $5000 each year into your retirement account, starting in one year. If these funds earn an average of 5% per year over the 27 years until your retirement, what will be the value of your retirement account upon retirement? Your Answer: Answer Hide hint for Question 11 NOTICE THAT THE ONLINE FINANCIAL CALCULATOR HAS THE BUTTON FOR PAYMENTS MADE AT THE END OF THE PERIOD. THIS IS THE DEFAULT OF THE CALCULATOR, AND THE WORDS 'STARTING IN ONE YEAR' ARE JUST CONFIRMATION THAT YOU WANT THAT END OF THE PERIOD BUTTON SELECTED.
Question 11 You deposit $5000 each year into your retirement account, starting in one year. If these funds earn an average of 5% per year over the 27 years until your retirement, what will be the value of your retirement account upon retirement? Your Answer: Answer
Chapter 10 Discussion Q2 A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What is the present value (PV) at time 0, given that the interest rate is 11%? Show your steps. A) $2695 B) $4312 C) $5390 D) $3234
Problem 5-10 Calculating Perpetuity Values [LO 1] Larry's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $28,000 per year forever. Assume the required return on this investment is 7.6 percent. How much will you pay for the policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Policy value today
FIN2230 Chapter 9 Assignment i 4 If you invest $14,500 per period for the following number of periods is received at the beginning of each year. (Annuity in advance) (Use a Financial calculator to arrive at the answers. Round the final answers to the nearest whole dollar.) a. 9 years at 4 percent Future value $ b. 16 years at 12 percent Future value $ c. 20 periods at 15 percent Saved Future value
Problem 06.027 AW of a Permanent Investment How much must you deposit each year into your retirement account starting now and continuing through year 12 If you want to be able to withdraw $75,000 per year forever, beginning 34 years from now? Assume the account earns Interest at 9% per year. The amount to be deposited is determined to be $ 5242.86
QUESTION 9 Norbert Chapa is saving for retirement by putting away $6,090.00 every day for 6 years. How much is this investment worth at the end of 6 years if payments begin today" Assume an interest rate of 1.00%. Oa. $35,295.42 b. $12,945,053.24 Oc. $13,745,519.33 O d. $37,466.80
A Question 1 Suppose you are offered an investment that will allow you to triple your money in 8 years. What is the implied rate of interest? Retake question O 14.72 percent O 9.26 percent Not enough information 11.61 percent 8.50 percent
Incorrect Question 13 Suppose you invest $2,500 in a fund earning 15% simple interest. Further suppose that you have the option at any time of closing this account and opening an account earning compound interest at an annual effective interest rate of 9%. At what instant should you do so in order to maximize your accumulation at the end of five years? (Round your answer to two decimal places.) 4.53 years How about if you wish to maximize the accumulation at the end of ten years? (Round your answer to two decimal places.) 4.53 years
Question 14 Suppose for an annuity due, you want to have $30,000 in the bank after 20 years. Assuming you make deposits at the beginning of each year at an interest rate of 4%, how much would you have to deposit at the start of each year, assuming that each deposit is the same amount? A) s968.70 B $816.22 $625.00 $737.24

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