Question

Investment opportunity, save or pay $500 every month, you will earn 8% per year of interest...

Investment opportunity, save or pay $500 every month, you will earn 8% per year of interest rate. How much you will get at the end of year tenth? Hint: Annuity (Excel)

Homework Answers

Answer #1

Monthly payment

500

Interest rate

8%

Monthly rate

0.67%

No. of years

10

No. of periods

120

Future value of annuity = Monthly payment x FV annuity factor

Future value of annuity = Monthly payment x (((1+monthly rate)^no. of periods -1)/monthly rate)

Future value of annuity = 500 x (((1+0.67%)^120 -1)/0.67%)

Future value of annuity = 500 x 182.9460

Future value of annuity = $ 91,473 ---> Amount at the end of year Tenth.

Hope this helps you answer the question. Please provide your feedback or rating on the answer.

Thanks

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
Suppose you have $500 to invest and you believe that you can earn 8% per year...
Suppose you have $500 to invest and you believe that you can earn 8% per year over the next 15 years. How much would you have at the end of 15 years using compound interest? How much would you have using simple interest?
You begin to put $6,000 every month in an investment account paying 8% interest for the...
You begin to put $6,000 every month in an investment account paying 8% interest for the next 10 years, and you will deposit the money at the beginning of each period. How much will you have at the end of the 10 year period?
You are considering an investment that promises to pay $1,000 per year for the next 10...
You are considering an investment that promises to pay $1,000 per year for the next 10 years. The interest rate associated with investments having similar risk is 6.0%. How much would you be willing to pay for this investment? Hint: students may wish to use Excel to facilitate the calculations
You are planning to save $350 at the end of every month to accumulate $20,000 for...
You are planning to save $350 at the end of every month to accumulate $20,000 for a down payment on a house. If you earn 5% interest compounded monthly, how many years would it take to save the $20,000?
To prepare for retirement you are setting aside $250 per month for the next 30 years...
To prepare for retirement you are setting aside $250 per month for the next 30 years and can earn 5.5 percent annual interest. Suppose in 30 years you can buy an annuity that will pay you in monthly installments for 25 years after your retirement, and you expect to earn 4 percent annual interest at that time. How much will you receive each month from this investment opportunity when you retire? Assume all payments occur at the end of each...
You are considering investment that is going to pay $1,500 a month starting 20 years from...
You are considering investment that is going to pay $1,500 a month starting 20 years from today for 15 years. If you can earn 8 percent return on any investment, compounded monthly, how much at most are you willing to pay for this investment opportunity?
1.If you save $100 per month, what annual rate of interest must you earn in order...
1.If you save $100 per month, what annual rate of interest must you earn in order to accumulate $10,000 after ____ years? 2. If you borrow $250,000 for ______ years and your monthly payment is $1000, what rate of interest are you paying?
You have an opportunity to make an investment that will pay ​$300 at the end of...
You have an opportunity to make an investment that will pay ​$300 at the end of the first​ year, ​$500 at the end of the second​ year, ​$400 at the end of the third​ year, ​$100 at the end of the fourth​ year, and $ 200 at the end of the fifth year. a. Find the present value if the interest rate is 6 percent. ​ b. What would happen to the present value of this stream of cash flows...
A friend calls you with a great investment opportunity, that will produce a return to you...
A friend calls you with a great investment opportunity, that will produce a return to you of $2000 per year for 5 years starting at the end of the year 2 years from now, and $5000 the year after that. Assuming you could invest in an investment of similar risk eslewhere at an annual interest rate of 8%, what is the most you should be willing to pay for this investment? Please Show Using Excel Formulas!!!!!!!!!!!!!!!!!!!!
1) If you retire in 40 years, you want to have $2.5 million saved. The interest...
1) If you retire in 40 years, you want to have $2.5 million saved. The interest rate is 7%. If you start saving today, how much must you save every year in order to achieve your goal? **Can you show me using excel? 2) You get a 60 month car loan for $15,000. If the interest rate quoted is 4%, but you decide to pay $750 per month instead, how much faster will you be able to pay off the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT