Answered: Zach depsoits a $38,000 one-time lump…

Zach depsoits a $38,000 one-time lump sum in an account with an APR of 7% that is compounded quarterly. What is the value of Zach's investment after 24 years?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 18PROB

See similar textbooks

Related questions

Q: The market expects a stock to return 14.54% over the next year. The stock's beta is 0.84. If the…

A: Alpha is a term which is used to investing in the market , It represent the investing strategy and…

Q: 6. Determine the equivalent present worth in year 0 (PT) of all of the cash flows at i = 12% per…

A: Data given: i= 12% Initial cash flow in year 0 = $30000 Annual cash flow from year 1 to 3 = $5000…

Q: The Flemings secured a bank loan of $272,000 to help finance the purchase of a house. The bank…

A: Amount of loan "P" is $272,000 Interest rate is 4% per year Monthly interest rate "r" is…

Q: Gabriel put 6000 in a 2 year CD paying 4% interest, compounded monthly. After 2 years he withdrew…

A: Investment amount (P) = 6000 Interest rate = 4% Monthly interest rate (r) = 0.33333333333333% Period…

Q: borrowed $69,100 to purchase a home the bank offered her an APR of 4.12% for a term length of 20

A: A mortgage is a loan that is used to buy or maintain a home, land, or other type of real estate. The…

Q: 3860. How much she st in each fund?

A: A well-balanced portfolio includes a mix of assets such as stocks, bonds, real estate, and gold…

Q: Consider the binomial model for an American call and put on a stock that pays no dividends. The…

A: European call option used to give an owner the right for acquiring an underlying security at an…

Q: Here's an example of how breakpoint discounts on sales commissions for mutual fund investors work:…

A: NAV refers to net asset value. For a mutual fund its NAV = total assets - total liabilities

Q: Question 6. One day, a letter arrives in your mailbox. The letter comes from a trusted attorney…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: If WideWorld is choosing one of the above mutually exclusive projects (Project A on Project B),…

A: The decison regarding the project can be taken based on NPV or Net present value. This is one of the…

Q: calculate the stocks expected rate of return b) determine the stocks actual rate of return c) should…

A: The stock market refers to the collection of exchanges where the buying, selling, and trading of…

Q: A standard “fixed for floating” interest rate swap contract is effectively a series of call…

A: Interest rate swaps are the derivative contracts where two parties exchange cashflows each other on…

Q: A student needs P4000 per year for 4 years to attend college. Her father invested P5000 in a 7%…

A: The purchasing power of money decreases with time. This is called time value of money. The future…

Q: You need additional cash for the payment of your tuition fee and other expenses for your studies.…

A: Solution:- When a loan is taken, it can be either repaid as a lump sum payment or in installments.…

Q: Industrial Organization 1. Suppose firms’ market shares in the US mobile services market are as…

A: HHI measures market concentration Herfindahl-Hirschman index measures the size of firms with regard…

Q: You are considering taking out a loan of $10,000.00 that will be paid back over 12 years with…

A: We need to use loan amortisation formula to calculate unpaid balance of loan Unpaid balance(P)…

Q: Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: You are looking to buy a $275,599.00 home in Haverhill. If Bank of America will give them a 30-year…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: The account balance is approximately $. Simplify your answer. Type an integer or decimal rounded to…

A: Here we will use the concept of compounding. When determining the future value of a cash flow we do…

Q: You are a credit analyst of a growing commercial bank and have recently received loan applications…

A: Given, Two companies Company Blue and company Red.

Q: Which of these has the biggest potential risk area? O a. Cash Machines O b. Mobile Banking O c.…

A: A cash machine can be defined as a machine that dispenses cash to the users by inserting a card;…

Q: Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t…

A: Principal amount (P) = $43,000 Interest rate (r) = 9 3/4% = 9.75% Period (t) = 9 Years Compounding…

Q: A buyer earns $48,000 salary per year. In order to qualify for an 85 percent loan, his monthly PITI…

A: Introduction = Every person needs loan to buy his house, to run his business, education loan etc.…

Q: Toyota S murang auto finance company is prepared to offer you a loan of $38,000 to buy a new Toyota…

A: Loan amount (L) = $38000 n = 7 years r = 12% Let A = Annual repayment

Q: Assume that a new law is passed which restricts investors to holding only one asset. A risk-averse…

Q: How can the risk of international problem loans be reduced?

A: Risk refers to uncertainty that will happen in the future with respect to the investments that have…

Q: When estimating the loss reserves in car insurance, the ________________ is used to assign a loss…

A: Insurance companies provide insurance for vehicles and personal based on that premium are charged…

Q: Michaela Marie invested in Home Development Mutual Fund (HDMF) Pag-IBIG MP2 worth Php 300,000 for…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: a) Enter your desired amount of money you wish to receive each month while retired = 3 7000 b) Upon…

A: The money as you deposit each month grow to much larger amount due to effect of compounding of…

Q: Question 5: Find the missing EAR and APR in each of the following cases: APR Number of Times…

A: Effective rate is computed based on its compounding period and Effective rate always equal to or…

Q: uppose today that you have the following information: yield on 10-year TIPS: 3.5% yield on 10-year…

A: The rate at which prices rise over time is known as inflation. Inflation is a broad measure of price…

Q: Christina is deciding whether or not to enroll in a one-year academic program at the start of 2023…

A: The internal rate of return is the rate which equates the present value of cash inflows from a…

Q: city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public…

A: B/C ratio is benefit to cost can be found as present value of annual benefits to initial investment…

Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…

A: Preferred stocks are those stocks that do not carry voting rights but pays a set schedule of…

Q: Management is considering buying a pump that costs $20,000 and could save them $7,500 per year over…

A: NPV is the difference between the Present Value of Cash Inflows and Initial Investment. A project…

Q: Smith Company is a firm specializing in financial advice for retired individuals. After some…

A: Given, Earnings multiplier is 7 Earnings $261,000 Earnings per share is $5.60.

Q: How long would it take to recover and investment of $250,000 in enhanced CNC controls that include…

A: The following information has been provided in the question: Amount of investment= $250,000…

Q: Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It…

A: Given, The cost of machine is $6,000,000 Installation charges $10,000

Q: Solar and conventional alternatives are available for providing energy at a remote U.S. Am training…

A: Benefit cost ratio is an important tool to assess the financial feasibility of projects. Using this…

Q: Explain the difference between the unbiased expectations theory of the term structure of interest…

A: There are different theories that describe how the interest rates are set.

Q: The manufacturing firm Rebo is considering a new capital investment project. The project will last…

A: NPV is calculated by deducting present value of cash outflows from present value of cash inflows.

Q: a) Draw up the repayment table for a loan of $500,000 at a rate of 7% repayable in 4 constant annual…

A: Loan Amount after 2 years = 500000*(1+i)^2 = 500000*(1.07)^2 = $5,72,450 Repayment Amount…

Q: Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment…

A: Data given: Description Manufacturing Subsidiary (Singapore) Marketing Subsidiary (US) Revenue…

Q: Management is considering buyıng a pump that costs $20,000 and could save them $7,500 per year over…

A: NPV is the difference between Present Value of cash Inflows and Initial Investment. A project with…

Q: Bill's Bakery has current earnings per share of $2.50. Current book value is $4.30 per share. The…

A: Data given: Current earning per share = $2.50 Current book value per share = $4.30 per share…

Q: 3.15 An organization has the following data: Variable manufacturing costs (DM is P2.50) Fixed…

A: Operating income Variable costing method: It is the statement where all variable expenses are…

Q: Which derivative does not reduce financial risk? a. options b. swaps c. futures d.forwards e.…

A: Financial derivative is referred as the financial instrument, which can link to the particular…

Q: The Table Q3 shows the cash flow for a project over 6 years. Using the simple payback method, graph…

A: The break-even point and payback period: The accounting period in which a corporation makes enough…

Q: 23. You have just been offered a contract worth $1.12 million per year for 7 years. However, to…

A: The maximum capital investment that can be made for a project is the present value of all returns…

Q: You are looking to buy a $275,599.00 home in Haverhill. If Bank of America will give them a 30-year…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Concept explainers

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.

Question

Zach depsoits a $38,000 one-time lump sum in an account with an APR of 7% that is compounded quarterly.

What is the value of Zach's investment after 24 years?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Hui deposits $800 at the end of every 3 months in an RRSP that is earning 5.10% compounded semi-annually. For the RRSP to accumulate to $33,000, calculate the following: a. How many deposits will he have to make? b. How long will he have to make these deposits? (Years & Months)
Ryan invests a sum of money in a retirement account with an annual interest rate of 7% compounded quarterly. After 10 years, the balance reaches 11,008.79. What was the amount of the initial investment?
At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8% compounded annually. How much is in the account today? How much would be in the account if the deposits were made at the beginning of each year (PMT Type) than at the end of each year? (Use Future Value of an Annuity
Juan deposits $5,000 into a savings account that pays 7.2% per year, continuously compounded. What is the effective annual interest rate Determine the value of his account at the end of two years.
Wasim invests $220,000 in an annuity that earns 8.50% interest compounded quarterly. It makes monthly payments over 20 years. What is the amount of the final payment?
Timothy invests $5,000 at 17% interest compounded daily for three years. How much does he have in the account at the end of three year? Show formula with values filled in.
Steve invests $1,800 in an account that earns 3.7% annual interest, compounded continuously. What is the value of the account after 10 years? Round your answer to the nearest dollar.
Ethan invested $2,200 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 3.50% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.40% compounded semi-annually. a. Calculate the accumulated value of his investment after the first 8 years. Round to the nearest cent b. Calculate the accumulated value of his investment at the end of 11 years. Round to the nearest cent c. Calculate the amount of interest earned from the investment.
John invests a sum of money in a retirement account with a fixed annual interest rate of 2.63% compounded continuously. After 15 years, the balance reaches $1,912.41. What was the amount of the initial investment?
John invests $ 350 on the last day of each month into an account for 4 years compounding monthly at an interest rate of 7.5%, and then allows that investment to earn interest for the next 3 years. What is the value of his investment at the end of the seventh year?
Kadeem invested $800 in an account that pays 4.25% interest compounded annually. Assuming no deposits or withdrawals are made, find how much money Kadeem would have in the account 9 years after his initial investment. Round to the nearest tenth (if necessary).
Hanna invests $8400 for 8 years and 10 months. The account earns 5% semiannually. a) What is n for the compound interest part? b) What is the future value after the compound interest part? c) Simple interest is used for how many months? d) Assuming simple interest for the partial period, how much money does Hanna have in the account at the end of 8 years and 10 months?