You currently have $60,000 in your bank account and you will need a total of $100,000...

You currently have $60,000 in your bank account and you will need a total of $100,000 in 5 years to pay for a down payment on a house. What interest rate do you need to earn in order to have $100,000 in your bank account 5 years from now?

Expert Solution

Future value of an amount deposited is computed as,

So, P = Initial amount

i = Interest rate

n = Number of years

So, interest rate is 10.757%

jeff jeffy answered 2 years ago

You currently have $55,000 in your retirement account. You will make deposits of $11,000/year into your account...

You currently have $55,000 in your retirement account. You will make deposits of $11,000/year into your account for the next 20 years. If the account earns 8% compounded quarterly, calculate how much you have in your account when you retire in 20 years.

Calculating Annuity Values. You want to have $60,000 in your savings account 12 years from now,...

Calculating Annuity Values. You want to have $60,000 in your savings account 12 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.4 percent interest, what amount must you deposit each year? Calculating Annuity Values. Your company will generate $47,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 7.1 percent, what is...

Your dream boat costs $100,000. You have $20,000 but you need to borrow the remaining $80,000....

Your dream boat costs $100,000. You have $20,000 but you need to borrow the remaining $80,000. Your bank offers you a loan with the following characteristics: APR of 5%, monthly payments, a maturity of 5 years. Assume that you can afford the original loan the bank offered you. Now consider the last month of your loan (the last month during which you make a payment). What is your balance at the end of the month? What is your balance at...

You are developing a 100,000 sqft industrial building. The bank is financing 60% of the total...

You are developing a 100,000 sqft industrial building. The bank is financing 60% of the total project cost, interest-only at 4%, while the balance is funded by the MP. The draw schedule is as follows July 2020: 2.0M August 2020 - March 2021: $1.0M/month The total budget is $10.0M Assume the construction interest for a given month is equal to the monthly interest rate times the prior month outstanding balance plus current month draw, for example, October interest = monthly...

You are planning your retirement in 10 years. You currently have $164,000 in a bond account...

You are planning your retirement in 10 years. You currently have $164,000 in a bond account and $604,000 in a stock account. You plan to add $7,600 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 10.5 percent and the bond account will earn a return of 7 percent. When you retire, you plan to withdraw an equal amount for each of the next 21...

You are planning your retirement in 10 years. You currently have $120,000 in a bond account...

You are planning your retirement in 10 years. You currently have $120,000 in a bond account and $500,000 in a stock account. You plan to add $5,000 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 10.5 percent and the bond account will earn a return of 7 percent. When you retire, you plan to withdraw an equal amount for each of the next 25...

You currently have $2,500 in your savings account. You would like to have $10,000 five years...

You currently have $2,500 in your savings account. You would like to have $10,000 five years from today. How much must you deposit in equal amounts at the end of each month for the next five years in order to reach your goal at an interest rate of 9% per year, compounded monthly?

4. For liquidity purposes, a client keeps $100,000 in a bank account. The bank quotes a...

4. For liquidity purposes, a client keeps $100,000 in a bank account. The bank quotes a stated annual interest rate of 7 percent. The bank’s service representative explains that the stated rate is the rate one would earn if one were to cash out rather than invest the interest payments. How much will your client have in his account at the end of one year, assuming no additions or withdrawals, using the following types of compounding? A. Quarterly. B. Monthly....

Suppose you have $10,000 in your bank account and the opportunity to invest in a 5-year...

Suppose you have $10,000 in your bank account and the opportunity to invest in a 5-year project with the following certain cash flows: Year 1 2 3 4 5 CF $0 $0 $0 $0 $25,000 The risk-free interest rate in the economy is 10% per year for the next 5 years. Yesterday however, your car suddenly broke down and you need to buy a new one which would cost $10,000. Assume you really need the car to go to work,...

You have $60,000 in cash, $40,000 in accounts receivable, $100,000 in inventory, $65,000 in accounts payable,...

You have $60,000 in cash, $40,000 in accounts receivable, $100,000 in inventory, $65,000 in accounts payable, $25,000 in accrued expenses on 12/31/2017. What was your net working capital balance on this date?

Question