31) Today, Dexter is investing $24,000 at 5.5 percent, compounded annually, for 6 years. How much additional income could he earn if he had invested this amount at 6.5 percent, compounded annually (note need to compute both)? A) $1,515.04 B) $1,927.19 C) $2,007,49 D) $2,515.04 E) $2.927.19 1320 G 6.5

31) Today, Dexter is investing $24,000 at 5.5 percent, compounded annually, for 6 years. How much additional income could he earn if he had invested this amount at 6.5 percent, compounded annually (note need to compute both)? A) $1,515.04 B) $1,927.19 C) $2,007,49 D) $2,515.04 E) $2.927.19 1320 G 6.5

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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An individual has $1,000 to invest and wants to accumulate $1,470 in 5 years. What interest rate, compounded semiannually, must be earned to accomplish the objective?
Ali contributed $1,000 per year for the past 9 years into an RRSP account, earning 3.8% compounded annually. If he leaves the accumulated contributions for another 5 years in the RRSP at the same rate of interest, a. How much will Ali have in total in his RRSP account? b. How much did Ali contribute? c. How much will be the interest?
Four years ago, Leroy invested $12,600.00. Today, he has $20,700.00. If Leroy earns the same annual rate implied from the past and current values of his invsetment, then in how many years from today does he expect to have exactly $50,600.00 O 7.20 years (plus or minus 0.05 years) 7.57 years (plus or minus 0.05 years) O 6.25 years (plus or minus 0.05 years) 11.20 years (plus or minus 0.05 years) None of the above is within .05 percentage points of the correct answer
Two years ago, Kevin invested $9,400.00. Today, he has $10,800.00. If Kevin earns the same annual rate implied from the past and current values of his invsetment, then in how many years from today does he expect to have exactly $40,700.00 O 19.11 years (plus or minus 0.05 years) O 21.11 years (plus or minus 0.05 years) O 13.91 years (plus or minus 0.05 years) O 29.07 years (plus or minus 0.05 years) O None of the above is within .05 percentage points of the correct answer
Two years ago, Christopher invested $1,530.00. He has earned and will earn compound interest of 8.06 percent per year. If Charles invests $1,630.00 in 1 year from today and earns simple interest, then how much simple interest per year must Charles earn to have the same amount of money in 6 years from today as Christopher will have in 6 years from today? Answer as an annual rate. A rate equal to or greater than 15.52% but less than 16.66% A rate equal to or greater than 56.04% but less than 58.32% A rate equal to or greater than 16.66% but less than 36.04% A rate less than 15.52% or a rate greater than 58.32% A rate equal to or greater than 36.04% but less than 56.04%
Your grandmother invested $1,000 for you the day you were born. How much will this investment be worth on your 30th birthday, assuming the investment earned 6% interest compounded quarterly?
If Maria wants to be a millionaire ($1,000,000) by the time she retires (45 years from now), how much does she need to put into an investment that is paying 8% interest compounded semi-annually? A) $29,308.90 B) $171,198.41 C) $31,327.88 D) $176,996.84
5. Dan plans to retire in 25 years, when he is 65 years old. At that time, he would like to have saved $250 000 in his RRSP. a) Determine the monthly deposits he should make into his RRSP if the rate of interest earned is fixed at 5.5% per year, compounded monthly. b) Determine the amount of interest his investments earned.
A young man is the beneficiary of a trust fund established for him 18 years ago at his birth. If the original amount placed in trust was $20,000, how much will he receive if the money has earned interest at the rate of 5%/year compounded annually? Compounded quarterly? Compounded monthly? (Round your answers to the nearest cent.) compounded annually $ compounded quarterly $ compounded monthly $
Consider an inheritance that pays the beneficiary an annuity of $400 that begins immediately (an annuity due) and then annually in year 1 through year 16 (for a total of 17 years) with one exception - the payment in year 11, and only 11, is not $400 but $0. Using an interest rate of 8%, determine the present value of this cash flow stream
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.)
D Two years ago, Reggie invested $19,900.00. Today, he has $21,600.00. If Reggie earns the same annual rate implied from the past and current values of his investment, then in how many years from today does he expect to have exactly $38,000.00 O 0.00 years (plus or minus 0.05 years O 15.78 years (plus or minus 0.05 years O 22.35 years (plus or minus 0.05 years O 13.78 years (plus or minus 0.05 years O None of the above is within .05 percentage points of the correct answer

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