Mike would like to know how much money he should invest annually in order to have...
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● ● Mike would like to know how much money he should invest annually in order to have $1,000,000 in 15 years. He assumes that he can earn 10% interest per year and the investment was made at the beginning of each year. What if the interest rate is compounded continuously? Option 7: If Mike is a millionaire today, how long will it take for his money to double if it is desired interest rate is 12% per year compounded semi-annually? Option 8: Mike requires a 6% annual return on his business investments. Assume he will receive $200,000, $300,000, $400,000 and $500,000 respectively for the next four years on a particular investment. What is the most he would be willing to pay for this investment? • Option 9: Mike plans to purchase a house and loan amount is one million with 30 years fixed rate of 5%. What will be his monthly mortgage? What will be his interest cost for the first month of the second year? Option 10: Mike starts saving money for his son to pay for his college. Hi son is 2 years old now and he is expected to go to a four year college at age 18. The current college tuition cost is $30,000 per year, and tuition is expected to grow at a constant rate of 3% annually. He plans to save $5000 at the beginning of each year during next 16 years. What would be his expected rate of return so that he can have enough money pay for his son's 4 year college tuition? ● ● Mike would like to know how much money he should invest annually in order to have $1,000,000 in 15 years. He assumes that he can earn 10% interest per year and the investment was made at the beginning of each year. What if the interest rate is compounded continuously? Option 7: If Mike is a millionaire today, how long will it take for his money to double if it is desired interest rate is 12% per year compounded semi-annually? Option 8: Mike requires a 6% annual return on his business investments. Assume he will receive $200,000, $300,000, $400,000 and $500,000 respectively for the next four years on a particular investment. What is the most he would be willing to pay for this investment? • Option 9: Mike plans to purchase a house and loan amount is one million with 30 years fixed rate of 5%. What will be his monthly mortgage? What will be his interest cost for the first month of the second year? Option 10: Mike starts saving money for his son to pay for his college. Hi son is 2 years old now and he is expected to go to a four year college at age 18. The current college tuition cost is $30,000 per year, and tuition is expected to grow at a constant rate of 3% annually. He plans to save $5000 at the beginning of each year during next 16 years. What would be his expected rate of return so that he can have enough money pay for his son's 4 year college tuition?
Expert Answer:
Answer rating: 100% (QA)
For option 6 To find the annual investment required to have 1000000 in 15 years with a 10 annual interest rate we can use the formula PV PMT x 1 rn 1 r PMT PV x r 1 rn 1 Substituting the given values ... View the full answer
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
Posted Date:
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