Question

What lump sum of money must be deposited into a bank account at the present time so that $600 per month can be withdrawn for six years, with the first withdrawal scheduled for seven years from today? The interest rate is 1/2% per month. (Hint: Monthly withdrawals begin at the end of the month 84.)

Answer #1

Time Value of Money
a. What is the present value of a $2,000 lump sum to be paid in
six years if interest rate is 5%?
b. Suppose you deposit $1,000 today in an account that pays 8%
APR. How many years will it take the account balance to grow to
$3,000 if interest is compounded quarterly?

Time Value of Money
What is the present value of a $2,000 lump sum to be paid in
six years if interest rate is
5%?
Suppose you deposit $1,000 today in an account that pays 8%
APR. How many yearswill it take the account
balance to grow to $3,000 if interest is compounded quarterly?

An account pays an annual rate of 8% percent compounded monthly.
What lump sum must you deposit into the account now so that in 10
years you can begin to withdraw $4000 each month for the next 20
years, drawing down the account to zero?

How much money must be deposited in saving account each month to
accumulate $25,000 at the end of 6 years , if the bank pays
interest at the rate of 8% per year compounded Monthly? Quarterly
?

How much money must be deposited in saving account each month to
accumulate $25,000 at the end of 6 years , if the bank pays
interest at the rate of 8% per year compounded
a. monthly ?
b. quarterly ?

What lump sum deposited today at 8 ?% compounded quarterly for
15 years will yield the same final amount as deposits of ?$6000 at
the end of each? 6-month period for 15 years at 8 ?% compounded?
semiannually?
The value of the lump sum is?

Assume that you saved $641,000 in a retirement account. The
money is deposited in an account that earns 5% interest compounded
Weekly. You want to retire and begin making weekly withdrawals from
the account such that the money (principal and interest) lasts
exactly 23 years. What is the amount of the weekly withdrawal?

What lump sum deposited today at 8% compounded quarterly for 5
years will yield the same final amount as deposits of $3000 at the
end of each 6-month period for 5 years at 4% compounded
semiannually?

What lump sum deposited today at 12% compounded quarterly for
10 years will yield the same final amount as deposits of $4000 at
the end of each 6-month period for 10 years at 10% compounded
semiannually?

What lump sum deposited today at 12% compounded quarterly for 5
years will yield the same final amount as deposits of $5000 at the
end of each 6-month period for 5 years at 8% compounded
semiannually?

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