For the past 10 years you have been depositing $300 per month into the SPDR bond fund with an interest rate of 2.61% per year compounded monthly. You have now transferred your current balance to the Xtrackers bond fund with an interest rate of 2.71% per year compounded monthly, where you plan to continue depositing $300 per month until you retire in 15 years. How much can you anticipate having in the investment account when you retire?
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- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?Your brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 4.25 percent with the interest being paid quarterly. What will be the value of the investment in two years? wut of
- You have just deposited $9,500 into an account that promises to pay you an annual interest rate of 6.2 percent each year for the next 8 years. You will leave the money invested in the account and 20 years from today, you need to have $27,940 in the account. What annual interest rate must you earn over the last 12 years to accomplish this goal?A trust fund will pay you $1000 per month for life once you turn 18. You are currently 11. Interest rates are expected to be 4.95% compounded quarterly. What is the current value of your trust fund?You are 19 years old today. You want to have $381,507.06 in an investment account when you are 60 years old. You will start with an initial deposit in one year from now and grow it by 3% per year for a total of 15 investments. How much is the amount of that initial deposit? Assume an interest rate (a.k.a. return on your investment of 6%. Use the $ sign and a comma and round to the nearest thousand...(e.g. $8,000 would be the form of a correct answer). Hint..the correct answer should be very close to a multiple of $1,000. Previous Page Next Page Page 16 of 19
- You are 19 years old today. You want to have $381,507.06 in an investment account when you are 60 years old. You will start with an initial deposit in one year from now and grow it by 3% per year for a total of 15 investments. How much is the amount of that initial deposit? Assume an interest rate (a.k.a. return on your investment of 6%. Use the $ sign and a comma and round to the nearest thousand...(e.g. $8,000 would be the form of a correct answer). Hint....the correct answer should be very close to a multiple of $1,000.Assume that you will be opening a savings account today by depositing $125,000. The savings account will pay you 7.5% annual interest compounded quarterly, and this rate is assumed to remain in effect for all future periods. Five years from now you will withdraw R dollars. You will continue to make additional withdrawals of R dollars for a while longer – making your last withdrawal at the end of year 12 – to achieve the required pattern of withdrawals. How large must R be to leave you with exactly a zero balance after your final withdrawal is made at the end of year 12?You plan to invest an amount of money in a five-year certificate of deposit (CD) at your bank. The stated interest rate is 12%, compounded Quarterly. How much must you invest if you want the balance in the CD account to be $7,500 in five years?
- Determine the size of your investment account 23 years from now (when you plan to retire) if you deposit $15,000 each year, beginning 1 year from now, and the account earns interest at a rate of 9% per year. The size of the investment account is $You are planning to save for retirement over the next 35 years. To do this, you will invest $641 per month in a stock account and $496 per month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will return 7 percent. When you retire, you will combine your money into an account with a return of 6 percent. How much can you withdraw each month from your account assuming a 30-year withdrawal period?(Calculating Annuities) You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 11 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a 9 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?