HomeworkLib
Question

Lori wants to give her daughter $25,000 in 8 years to start her own business. How...

Lori wants to give her daughter $25,000 in 8 years to start her own business. How much should Lori invest today, at an annual interest rate of 8%, compounded annually, to have $25,000 in 8 years? a. $12,802.95. b. $13,210.34. c. $13,347.70. d. $13,506.72.

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

Homework Answers

Answer #1

PV = FV / (1 + r)n

= $25,000 / 1.088 = $25,000 / 1.8509 = $13,506.72

Hence, Option "D" is correct.

0 0
Add a comment
Know the answer?
Add Answer to:
Lori wants to give her daughter $25,000 in 8 years to start her own business. How...
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

  • 3. John Wilson wants to give her daughter $50,000 to start her own business in 5...

    3. John Wilson wants to give her daughter $50,000 to start her own business in 5 years. How much should he invest today at an annual interest rate of 9% to have $50,000 in 5 years? PV PMT FV

  • 1. Today Jim Byelow purchased an investment-grade diamond for $75,000. He expects it to increase in...

    1. Today Jim Byelow purchased an investment-grade diamond for $75,000. He expects it to increase in value at a rate of 10% a year for the next seven years. How much is he expecting his diamond to eventually be worth? - recepits nyear from now (interest rattetion 75000 (120) = FV 2. Sara Cellhigh wants to give her daughter $75,000 to start her own business when she graduates from business school in seven years with her M.B.A. How much should...

  • Bella seeks to start her own business in 5 years. In order to have the required...

    Bella seeks to start her own business in 5 years. In order to have the required funding, she will need to accumulate an additional 200,000 in today's dollars. If you assume inflation will be 2% and can earn 8%annually after-tax, how much will she have to invest at the beginning of each year?

  • As of today, Angela has $ 37937. She wants to save this money until her daughter...

    As of today, Angela has $ 37937. She wants to save this money until her daughter goes to college. If she can earn an average of 3.5%, compounded annually, she will have saved $ x when her daughter enters college 9 years from now.

  • MATHEMATICS OF BUSINESS AND FINANCE (A) How much should Taylor's dad invest into a savings account...

    MATHEMATICS OF BUSINESS AND FINANCE (A) How much should Taylor's dad invest into a savings account today, to be able to pay for Taylor's rent for the next six years if rent is $900 payable at the beginning of each month? The savings account earns 3.75% compounded monthly. (B) Since the birth of her daughter, 20 years ago, Alexis has deposited $190.00 at the beginning of every month into an RESP. The interest rate on the plan was 3.20% compounded...

  • 3) Yaling decides that she wants to purchase a car in 5 years that will cost...

    3) Yaling decides that she wants to purchase a car in 5 years that will cost her $25,000. She is going to invest money today at a 3% interest rate from her local bank. The bank pays the interest monthly. How much does Yaling need to invest today in order to have $25,000 in five year

  • her secured investments. How much should she invest today to meet this purpose? 3. Amna wants...

    her secured investments. How much should she invest today to meet this purpose? 3. Amna wants to deposit $5000 into a saving fund at the beginning of each month. If she can earn 12% compounded interest semiannually how much amount will be there in he saving fund at the end of 8 years?

  • Larry wants to start an IRA that will have $420,000 in it when he retires in...

    Larry wants to start an IRA that will have $420,000 in it when he retires in 29 years. How much should he invest semiannually in his IRA to do this if the interest is 6% compounded semiannually? A- $2354.65 B- $9288.16 C- $2767.16 D- $2754.16 E- $888.61

  • math

    Joan wants to start an IRA that will have $250,000 in it when she retires in 22 years. How much should she invest annually in her IRA to do this if the interest is 8% compounded annually? Round to the nearest cent.

  • a) Gregg just turned 22 and wants to have $10,283 saved in 8 years by his...

    a) Gregg just turned 22 and wants to have $10,283 saved in 8 years by his 30th birthday. If he currently has $6,000 in a bond fund, how much interest does he need to make this happen? b) You have saved $5,000 for a used car. If you invest it in a CD (Certificate of Deposit), earning 5 percent compounded annually, how long would it take to buy a car that costs $7,755? c) Linda needs $10,000 in 4 years...

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