An investor plans the following investments for the next 20 years: 12.00 years of $10,550.00 per...

An investor plans the following investments for the next 20 years: 12.00 years of $10,550.00 per year, and 8.00 years of $13,950.00 per year.

She thinks his investments will earn 5.00% a year for the first 12.00 years, and then earn 11.00% per year for the last 8.00 years. How much would the investor have to set aside today if she wants to fund the entire account?

PLEASE ROUND TO 2 DECIMAL PLACES. THANKS IN ADVANCE.

Expert Solution

Answer = $ 114,027.36

Note:

Year	Cash Flow	Discounting Factor	Present Value (Cash Flow * Discounting factor)
1	10550	0.952380952	10047.61905
2	10550	0.907029478	9569.160998
3	10550	0.863837599	9113.486665
4	10550	0.822702475	8679.511109
5	10550	0.783526166	8266.201056
6	10550	0.746215397	7872.572435
7	10550	0.71068133	7497.688033
8	10550	0.676839362	7140.655269
9	10550	0.644608916	6800.624066
10	10550	0.613913254	6476.784825
11	10550	0.584679289	6168.3665
12	10550	0.556837418	5874.634762
13	13950	0.257514256	3592.323864
14	13950	0.231994825	3236.327806
15	13950	0.209004347	2915.610636
16	13950	0.188292204	2626.676248
17	13950	0.169632616	2366.374999
18	13950	0.152822177	2131.869368
19	13950	0.137677637	1920.603034
20	13950	0.124033907	1730.273004
		Total =	1,14,027.36

jeff jeffy answered 1 year ago

An investor plans the following investments for the next 20 years: 12.00 years of $10,200.00 per...

An investor plans the following investments for the next 20 years: 12.00 years of $10,200.00 per year, and 8.00 years of $13,825.00 per year. She thinks his investments will earn 6.00% a year for the first 12.00 years, and then earn 11.00% per year for the last 8.00 years. How much would the investor have to set aside today if she wants to fund the entire account?

An investor plans the following investments for the next 20 years: 12.00 years of $10,075.00 per...

An investor plans the following investments for the next 20 years: 12.00 years of $10,075.00 per year, and 8.00 years of $13,775.00 per year. She thinks his investments will earn 4.00% a year for the first 12.00 years, and then earn 11.00% per year for the last 8.00 years. How much would the investor have to set aside today if she wants to fund the entire account?

Derek can deposit $266.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 12.00%

Derek can deposit $266.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 12.00% and compounds interest monthly. Derek can deposit $2,572.00 per year for the next 10 years into an account at Bank B. The first deposit will be made next year. Bank B compounds interest annually. What rate must Bank B pay for Derek to have the same amount in both accounts after...

Graham plans to save $100 each month for the next 20 years so he can purchase...

Graham plans to save $100 each month for the next 20 years so he can purchase a boat. If he earns 10% interest annually with monthly compounding, how much money will he have at the end of 20 years if he starts saving today?

Dr.Arrowhead will receive $150,000 per year for the next 20 years as an ordinary annuity payment...

Dr.Arrowhead will receive $150,000 per year for the next 20 years as an ordinary annuity payment for a high-tech slingshot weapon he invented. If a 6 percent rate is applied, should he be willing to sell out his future rights now for $2,000,000?

You have an opportunity to invest in an investment plan for the next 45 years. This plan will offer compound interest of 8 percent per year for the next 20 years and 11 percent per year for the last 25 years.

a) You have an opportunity to invest in an investment plan for the next 45 years. This plan will offer compound interest of 8 percent per year for the next 20 years and 11 percent per year for the last 25 years. If you invest $8,000 in this plan today, how much will you accumulate at the end of the 45 years? Choose the correct answer: $505,539.84 $501,516.38 $506,570.12 $509,092.54 $592,394.59 b) Your rich uncle will give you a...

Assume the following scenario: Bob plans to retire in 20 years from now and wants to...

Assume the following scenario: Bob plans to retire in 20 years from now and wants to have the following stream of CFs after retirement. Monthly payments of $4,000 for 15 years starting right after retirement (The first payment will be at the end of the first month in year 21). He then needs an extra 50000$ with the final payment (final month of year 35). Starting from year 36, he wants the monthly payments to be 6000$ for 10 years...

Next year's earnings are estimated to be $5. the company plans to reinvest 20% of its...

Next year's earnings are estimated to be $5. the company plans to reinvest 20% of its earnings at 15%. If the cost of equity is 9% what is the present value of growth opportunities? A. $9.09 B. $10.10 C. $11.11 D. $12.21

Which of the following investments is clearly preferred to the others for an investor who is...

Which of the following investments is clearly preferred to the others for an investor who is not holding a well-diversified portfolio.. Asset E(r) σ2 A .15 .10 B .18 .12 C .21 .08

A U.S. investor and an Italian investor are considering investments in the U.S. and the Eurozone....

A U.S. investor and an Italian investor are considering investments in the U.S. and the Eurozone. Both investors are quoted the following rates from their banks: Spot exchange rate (e$/€): $1.10/€ One-year forward rate (f$/€): $1.06/€ One-year interest rate on dollars (i$): 3.0% One-year interest rate on euros (i€): 5.0% Does Covered Interest Rate Parity hold given the rates quoted above? Should the U.S. investor make a one-year covered investment in euros or simply invest in dollars?...

Question