HomeworkLib
Question

How much would you have to invest today in the bank at an interest rate of...

How much would you have to invest today in the bank at an interest rate of 10% to have an annuity of $5600 per year for 7 years, with nothing left in the bank at the end of the 7 years?

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution:

Amount to be invested = $5,600 * Cumulative PV factor at 10% for 7 periods

= $5,600 * 4.86842

= $27,263

0 0
Add a comment
Know the answer?
Add Answer to:
How much would you have to invest today in the bank at an interest rate of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • How much would you need to invest today, assuming a fixed 7% annual interest rate, to...

    How much would you need to invest today, assuming a fixed 7% annual interest rate, to have $500,000 in 30 years with annual compounding of interest? If you deposit $10,000 today into an interest bearing account earning 6% per year, how much will you have 25 years from now with monthly compounding of interest? If you save $600 at the end of each month, how much will you have in 20 years, assuming a 6% interest rate and monthly compounding?

  • 1] Assume you have $2,500 to invest today at 5% interest compounded annually Determine how much...

    1] Assume you have $2,500 to invest today at 5% interest compounded annually Determine how much you will have accumulated in the account at the end of: a) 5 years b) 10 years 2] Assume instead an annuity of $2,500 (which means you will invest $2,500 per year) which will also be compounded at 5% interest annually. Determine how much you will have accumulated in the account at the end of (future value): (Note this problem is for an annuity...

  • a. You are saving for retirement 10 years from now. How much should you invest today...

    a. You are saving for retirement 10 years from now. How much should you invest today so you will have an annuity of $20,000 per year for 20 years starting from the 11" year? b. If you were to invest $10,000 today @6%, how much would you have at the end of 15 years? C. You are planning to save $100,000 for a yacht purchase 5 years from now. If you believe you can earn an 8% rate of return,...

  • 1. What is the amount you would need to invest today or order to have $30,000...

    1. What is the amount you would need to invest today or order to have $30,000 in 20 years and your investment has a 5% rate of return that is compounded annually? Round your answer to the nearest cent. 2. How much would you need to invest today in order to receive a monthly payment of $500 for 3 years. At the end of the three years there will be nothing left in the investment. This investment will yield 12%....

  • How much would you have to invest today if you did not need the $1000 for...

    How much would you have to invest today if you did not need the $1000 for 8 years? Round answer to the nearest dollar. Assume annual compounding and end of period mode. $__ the interest rate is 8%

  • How much should I invest today in a bank account that offers a 10% interest rate...

    How much should I invest today in a bank account that offers a 10% interest rate in order to be able to afford infinite payments of 2,000 €/year, the first one of them to be done next year?

  • If you invest $5,550 today at an interest rate of 6.75 percent, compounded daily, how much...

    If you invest $5,550 today at an interest rate of 6.75 percent, compounded daily, how much money will you have in your savings account in 7 years? Round the answer to two decimal places.

  • You have $200,000 in a bank account today. It accrues interest at the rate of 6%...

    You have $200,000 in a bank account today. It accrues interest at the rate of 6% annually. At the end of 20 years, you start withdrawing money from the account. The account still gains 6% per year on the remaining balance. How much can you withdraw per year if you want the account to last:

  • You have ​$5800 to invest today at 11​% interest compounded annually. a. Find how much you...

    You have ​$5800 to invest today at 11​% interest compounded annually. a. Find how much you will have accumulated in the account at the end of​ (1) 6 ​years, (2) 12 ​years, and​ (3) 18 years. b. Use your findings in part a to calculate the amount of interest earned in​ (1) the first 6 years​ (years 1 to 6​), ​(2) the second 6 years​ (years 7 to 12​), and​ (3) the third 6 years​ (years 13 to 18​). c....

  • PART A: If you invest $11,000 today at 11% interest, how much will you have in...

    PART A: If you invest $11,000 today at 11% interest, how much will you have in 11 years? A. $28,016 B. $17,688 C. $34,669 D. $31,712 PART B: How much must you invest at 5% interest in order to see your investment grow to $5,000 in 5 years? A. $3,918 B. $3,415 C. $3,105 D. None of the above

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT