Question: please answer this page with work. 1. How much will you have in four years if the CDs compounds annually? 2. How much will you
1. How much will you have in four years if the CDs compounds annually? 2. How much will you have in four years if the CDs compounds semi-annually? 3. How much will you have in four years if the CDs compounds monthly? 1: You find an advertisement saying there is an annual compounding investment a guarantee $ 60,000 in ten years if you invest $ 10,000 today. If your required rate return is 21%, will you take the investment? N: You want to take advantage of an investment vehicle that guarantees 13% annua return, annual compounding, to finish your saving goal of $ 40,000. You have $ 12,00 today to put in the account now. How long before you could achieve your goal? B. Annuity PV: You won a lottery, they offer you two options, 1) a lump sum payment today or 2) equal payments of $50,000 at the end of each year for the next 40 years. If the appropriate discount rate is 12% each year, what should be the lump sum payment today to make the two options equivalent? What should be the lump sum today if the payment is made at the beginning of each year? FV: From this year you plan to put a deposit of $ 8,000 in your investment account at the end of each year for 50 years. How much do you have in 50 years in your account? How much do you have in 50 years if you make your deposit at the beginning of the year? The compounding rate is 14% annually. PMT: You bank loan balance as of today is $100,000 and they charge you 10% every year. How much should you pay at the end of each year in order to pay off the debt in twenty years? inspiron
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