1a. Liz wants to deposit an amount today that will last for 5 years. She needs...

1a. Liz wants to deposit an amount today that will last for 5 years. She needs to withdraw $1,300 at the beginning of each 6-month period, and she’ll earn 8% compounded semi-annually on her investments. How much does she need to deposit to achieve her goal?

1b. Jane has been investing $4.125 at the end of each year for the past 18 years. Assuming that she has earned 6.35% compounded annually on her investments, she has accumulated a total of:

1c. Sam purchased an investment for $41,210. He expects it will increase in value at a rate of 7.25% compounded annually for the next 5 years. If his expectations are correct, how much will his investment be worth at the end of the fifth year?

Solutions

Expert Solution

1.
=PV(8%/2,2*5,-1300,0,1)=10965.931093688

2.
THE QUESTION HAS A TYPO-IT SAYS 4.125 instead of 4125. I have used 4125. But if it is indeed 4.125 then divide the answer below by 1000

=FV(6.35%,18,-4125)=131794.073919737

3.
=FV(7.25%,5,0,-41210)=58477.5432488741

jeff jeffy answered 1 year ago

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