Dan loves to work out. He has been saving money for a few years, and hopes...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dan loves to work out. He has been saving money for a few years, and hopes to start his own gym. He currently has $200,000.00 and plans on buying an existing gym in 6 years. Considering an interest rate of 12%, how much money does he need to invest every year so he can make the purchase of $600,000 in year 6? a) How much does Dan have now in the bank? $ b) What is the number of years? c) What is the interest rate? d) How much does he need in year 6? $ e) How much does he need to invest every year to have a total of $600,000 for the purchase? $[ % Dan loves to work out. He has been saving money for a few years, and hopes to start his own gym. He currently has $200,000.00 and plans on buying an existing gym in 6 years. Considering an interest rate of 12%, how much money does he need to invest every year so he can make the purchase of $600,000 in year 6? a) How much does Dan have now in the bank? $ b) What is the number of years? c) What is the interest rate? d) How much does he need in year 6? $ e) How much does he need to invest every year to have a total of $600,000 for the purchase? $[ %
Expert Answer:
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
Students also viewed these accounting questions
-
A corporate bond has a nominal interest rate of 12 percent. This bond is not very liquid and consequently requires a 2 percent liquidity premium. The bond is of low quality and thus has a default...
-
John decides to start saving money for a new car. He knows he can invest money into an account which will earn 6.5% APR, compounded weekly, and would like to have saved $10,000 after 5 years....
-
Judy wants to start saving money for a down payment on a house with the $2,500 tax refund she just received. Her goal is to have $20,000 after 2 years of saving. If her savings account has an APR of...
-
Suppose you are interested in purchasing AT&T stock. You know that AT&T stock has had an average rate of return of 8 % over the last 5 years. Explain how you could use descriptive statistics to help...
-
The Christian Science Monitor refused to hire Feldstein because he was not a Christian Scientist. The newspaper said they only hired those who were of the Christian Science religion, unless there are...
-
Please write a program that calculates the final score of multiple students using different weight of exams and assign their final grade using the following criteria: If the average grade is 90 or...
-
Forty-two percent of primary care doctors think their patients receive unnecessary medical care. a. Suppose a sample of 300 primary care doctors was taken. Show the distribution of the sample...
-
The following is a list of eight control plans from this chapter: Control Plans A. Limit checks B. Tickler files C. Public key cryptography D. Compare input data with master data E. Batch sequence...
-
MacPherson Corp. has borrowed to invest in a project. The loan calls for a payment of $17,500 every quarter for eight years. The lender quoted MacPherson a rate of 4.84 percent with weekly...
-
What is information systems analysis and design?
-
You want to invite your friend to a concert. You know that your friend is really busy with school but you also know there is a 40% chance he will say yes because he really likes the artist is...
-
Tamarisk Inc. is contemplating a capital project with a cost of $143000. The project will generate net cash flows of 542000 for year 1. $57000 for year 2 and $55000 for year 3. The asset has a...
-
Suppose a 9-month futures contract on a non-dividend paying stock with a share price of R60 and a risk-free interest rate of 0.8363% per month. You estimate that futures price should be priced to be...
-
1. Create a program that asks the user to create a password with 5-10 characters. While their password is the wrong size print an error message and keep asking them for a password. Once an acceptable...
-
A hair straightener (HS#8516.32) is made in Canada and its parts (HS#8516.90) are made from Mexico and China. The selling price for the hair straightener iron is CAD$50.00; the value for the...
-
E account and 1 balance sheet account, but never changes the fixed asset account. statement 3. The Ledger of the Day Company includes the following accounts. Briefly explain why each account may...
-
Next year, United Arms Inc. will have earnings per share of $6. The company is expected to continue to plow back 55 percent of its earnings.Into new investment projects with an average ROE of 22...
-
Interest Compounded Annually. When P dollars is invested at interest rate i, compounded annually, for t years, the investment grows to A dollars, where A = P(1 + i) t . Trevor's parents deposit $7800...
-
Webber Musicals Corporation is considering replacing its $2 million preferred share issue because market yields have declined. The existing preferreds carry a dividend of $5 per share, which is a...
-
The Quaid Brothers Corporation has preferred shares outstanding that pay an annual dividend of $12. Each has a price of $108. What is the required rate of return (yield) on the preferred stock?
-
Burt's Department Store needs $300,000 to take a cash discount of 3/10, net 70. A banker will loan the money for 60 days at an interest cost of $8,100. a. What is the annual rate on the bank loan? b....
-
Consider a binary equimolar mixture of acetone and chloroform at \(300 \mathrm{~K}\) and \(1 \mathrm{~atm}\). Because this mixture forms a binary azeotrope, methyl- \(n\)-pentyl ether solvent is used...
-
A system of three parallel reactions (Trambouze and Piret, 1959) involves the following reaction scheme: \[\mathrm{A} \xrightarrow{k_{1}} \mathrm{~B} \quad \mathrm{~A} \xrightarrow{k_{2}} \mathrm{C}...
-
Repeat Exercise 8.1, taking the first two reactions as first order, and the last as second order with \(k_{1}=0.02 \mathrm{~min}^{-1}, k_{2}=0.2 \mathrm{~min}^{-1}\), and \(k_{3}=2.0 \mathrm{~L} /...
Study smarter with the SolutionInn App