Calculate the following time value of money problems. a. What is the future value of 18...
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Calculate the following time value of money problems. a. What is the future value of 18 periodic payments of $6,200 each made at the beginning of each period and compounded at 7% per period? b. What would you pay for a $400,000 face value bond that matures in 12 years and pays $35,000 a year in interest (end-of-period payments) if you wanted to earn a yield of 7%. c. Mike Finley wishes to become a millionaire. His money market fund has a balance of $526,787.53 and has a guaranteed interest rate of 6%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000? d. Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund for 7 years (his planned retirement date). If Bogut plans to establish the AB Foundation once the fund grows to $2,076,160.15, what annually compounded interest rate must he earn to achieve his goal? Calculate the following time value of money problems. a. What is the future value of 18 periodic payments of $6,200 each made at the beginning of each period and compounded at 7% per period? b. What would you pay for a $400,000 face value bond that matures in 12 years and pays $35,000 a year in interest (end-of-period payments) if you wanted to earn a yield of 7%. c. Mike Finley wishes to become a millionaire. His money market fund has a balance of $526,787.53 and has a guaranteed interest rate of 6%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000? d. Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund for 7 years (his planned retirement date). If Bogut plans to establish the AB Foundation once the fund grows to $2,076,160.15, what annually compounded interest rate must he earn to achieve his goal?
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Answer Step by Step Explanation 5a Future value of an annuity 22554980 Here given that Number of pay... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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