u are planning to purchase a house for your son on his 21st birthday. He is now 11 years old. The house you will purchase for him will cost ¢300,000,000. You are thinking of two options. a. To deposit a lump sum which will grow to the amount required. b. To deposit each year a fixed amount to accumulate to the required amount. Required: If the interest rate is 15%, how much do you need for each option?
u are planning to purchase a house for your son on his 21st birthday. He is now 11 years old. The house you will purchase for him will cost ¢300,000,000. You are thinking of two options. a. To deposit a lump sum which will grow to the amount required. b. To deposit each year a fixed amount to accumulate to the required amount. Required: If the interest rate is 15%, how much do you need for each option?
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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Question
You are planning to purchase a house for your son on his 21st birthday. He is now 11
years old. The house you will purchase for him will cost ¢300,000,000. You are
thinking of two options.
a.
To deposit a lump sum which will grow to the amount required.
b.
To deposit each year a fixed amount to accumulate to the required amount.
Required:
If the interest rate is 15%, how much do you need for each option?
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