Question

Your company has a bond issue that'll be due in 15 years. Based on the terms...

Your company has a bond issue that'll be due in 15 years. Based on the terms of the bond, your company needs to start to set aside a fixed amount of money to make sure that the financial obligation in 15 years will be safely met. So your company has decided that starting from today, the company will make an annual deposit of $6.5 millions dollars for 15 years, with the first deposit to be made today (15 deposits in total), in a special financial account that pays a 6.20% annual rate. How much money will your company have in this account at the end of 15 years?

Note: your answer should be in millions of dollars, have two decimal points, and contain only numbers. For example, if your calculation is 2,556.38 million dollars, then input 2556.38 into the answer box.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 2 Your firm is concerned about a financial obligation of $19 million coming due in...
Question 2 Your firm is concerned about a financial obligation of $19 million coming due in 6 years. If your firm could earn 6.5% APR on an investment, how much would your firm have to invest today to fund (finance) the future $19 million obligation? (In other words, what is the PV of $19 M due 6 years from now if the interest rate is 6.5%?) Assume annual compounding. Answer in units of millions of dollars and to 2 decimal...
You are planning to buy a nice gift for your close friend 2 years later when...
You are planning to buy a nice gift for your close friend 2 years later when she turns 20 years old. The gift will cost $700 by then. a) If your saving account pays 6.5% interest rate per annum and you decide to deposit a single lump sum amount today, how much do you need to put down so you are able to accumulate $700 two years later? b) If you are able to make 3 annual deposits of $100,...
You are saving for the college education of your two children. They are two years apart...
You are saving for the college education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $55,000 per year per child, payable at the beginning of each school year. The annual interest rate is 9.2 percent. How much money must you deposit in an account each year to fund your children’s education? Your...
You are saving for the college education of your two children. They are two years apart...
You are saving for the college education of your two children. They are two years apart in age; one will begin college 13 years from today and the other will begin 15 years from today. You estimate your children’s college expenses to be $39,000 per year per child, payable at the beginning of each school year. The annual interest rate is 7.3 percent. Your deposits begin one year from today. You will make your last deposit when your oldest child...
You take out a $25,000 30 years mortgage with monthly payments and a rate of 3.5%,...
You take out a $25,000 30 years mortgage with monthly payments and a rate of 3.5%, monthly compounded. What is your monthly mortgage payment? You take out a $25,000 30 years mortgage with monthly payments and a rate of 3.5%, monthly compounded. What is the loan balance by the end of year 15? Calculate the future value at the end of year 4 of an investment fund earning 7% annual interest and funded with the following end-of-year deposits: $1,500 in...
You are saving for the college education of your two children. They are two years apart...
You are saving for the college education of your two children. They are two years apart in age; one will begin college 13 years from today and the other will begin 15 years from today. You estimate your children’s college expenses to be $39,000 per year per child, payable at the beginning of each school year. The annual interest rate is 7.3 percent. Your deposits begin one year from today. You will make your last deposit when your oldest child...
You are saving for the college education of your two children. They are two years apart...
You are saving for the college education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $43,000 per year per child, payable at the beginning of each school year. The appropriate interest rate is 7.3 percent. Your deposits begin one year from today. You will make your last deposit when your oldest child...
1. You would like to have $50,000 in 15 years. To accumulate this amount you plan...
1. You would like to have $50,000 in 15 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 7% interest annually. Your first payment will be made at the end of the year. o How much must you deposit annually to accumulate this amount? o If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? o At...
The Bluebird Company has a $10,000 liability it must pay three years from today. The company...
The Bluebird Company has a $10,000 liability it must pay three years from today. The company is opening a savings account so that the entire amount will be available when this debt needs to be paid. The plan is to make an initial deposit today and then deposit an additional $2,500 a year for the next three years, starting one year from today. The account pays a 3% rate of return. How much does the Bluebird Company need to deposit...
1. A one-year discount bond promises to pay 132,000 dollars next year. Brad requires a 20%...
1. A one-year discount bond promises to pay 132,000 dollars next year. Brad requires a 20% rate of return from this bond. In other words, if he thinks that the rate of return from this bond is less than 20%, he will not buy it. Another way of saying the same thing is that, Brad is not willing to pay a penny more than ______ dollars for this bond. 2. Suppose that a special bank account is paying an annual...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT