Question

The ABC Arena Company wishes to save money to replace the ice making equipment in 12 years. How much should be deposited every 6 months into an account that pays 9% per annum compounded semi-annually in order to have $120,000 for the replacement in 12 years?

Answer #1

We can use the future value of annuity formula to find the answer:

Where,

FVA = Future Value of Annuity

A = Annuity or payment

i = rate of interest

n = number of years

a = number of payments in a year

**Therefore, ABC Arena Company must deposit $2,878.44
every 6 months.**

ABC Company wants to have $82,761 in nine years. The company intends to
accumulate that amount by making equal semi-annual cash deposits at the
beginning of every six months for nine years into a bank account that
pays 10% interest compounded semi-annually.
Calculate the amount of each semi-annual deposit.
Use the time value of money factors posted in carmen to answer this question.
To access these factors, click modules and then scroll to week 12. Click on
the link labeled...

Daryl wishes to save money to provide for his retirement. He is
now 30 years old and will be retiring at age 64. Beginning one
month from now, he will begin depositing a fixed amount into a
retirement savings account that will earn 12% compounded monthly.
Then one year after making his final deposit, he will withdraw
$100,000 annually for 25 years. In addition, and after he passes
away (assuming he lives 25 years after retirement) he wishes to
leave...

Daryl wishes to save money to provide for his retirement. He is
now 30 years old and will be retiring at age 64. Beginning one
month from now, he will begin depositing a fixed amount into a
retirement savings account that will earn 12% compounded monthly.
Then one year after making his final deposit, he will withdraw
$100,000 annually for 25 years. In addition, and after he passes
away (assuming he lives 25 years after retirement) he wishes to
leave...

Daryl wishes to save money to provide for his retirement.
Beginning one year from now, Daryl will begin depositing the same
fixed amount each year for the next 30 years into a retirement
savings account. Starting one year after making his final deposit,
he will withdraw $100,000 annually for each of the following 25
years (i.e. he will make 25 withdrawals in all). Assume that the
retirement fund earns 12% annually over both the period that he is
depositing money...

You are going to save money for your son’s education. You have
decided to place $786 every half year at the end of the period into
a saving account earning 5.15 percent per year, compounded
semi-annually for the next 13 years. How much money will be in the
account at the end of that time period?

You are going to save money for your son’s education. You have
decided to place $579 every half year at the end of the period into
a saving account earning 3.07 percent per year, compounded
semi-annually for the next 5 years. How much money will be in the
account at the end of that time period?

You are going to save money for your son's education. You have
decided to place $2,454 every half year at the end of the period
into a saving account earning 7.47 percent per year, compounded
semi-annually for the next 10 years. How much money will be in the
account at the end of that time period?

Problem
Daryl wishes to save money to provide for his retirement. He is
now 30 years old and will be retiring at age 64. Beginning one
month from now, he will begin depositing a fixed amount into a
retirement savings account that will earn 12% compounded monthly.
Then one year after making his final deposit, he will withdraw
$100,000 annually for 25 years. In addition, and after he passes
away (assuming he lives 25 years after retirement) he wishes to...

3b4
You are going to save money for your son’s education. You have
decided to place $2,724 every half year at the end of the period
into a saving account earning 11.02 percent per year, compounded
semi-annually for the next 11 years. How much money will be in the
account at the end of that time period?
Round the answer to two decimal places.

In an effort to save money for early retirement, an
environmental engineering colleague plans
to deposit $1500 every 3 months into a bank account. The first
deposit will be made 3 months
from today and the last deposit will be made at year 10.
A) If the bank’s interest rate is 12% per year compounded
continuously, how much will be in
the account at the end of 10 years? (12.5 points)
B) If the bank’s interest rate is still 12%...

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