Question
In: Finance
An advertised investment product promises to pay $439 per month for 74 months commencing in 1...
An advertised investment product promises to pay $439 per month for 74 months commencing in 1 month from today.
If the investment earns 12.0% p.a compounding monthly, how much will the investment product cost today? (round to nearest cent; don’t use $ sign or commas) Select one:
a. $22877.57 b. $23106.35 c. $1839.59 d. $2060.34
Solutions
jeff jeffy answered 1 year agoRelated Solutions
An investment firm offers the following: Pay us $5033 per month for 141 months, and then...
An investment firm offers the following: Pay us $5033 per
month for 141 months, and then we will pay you $5033 per month
forever after that. What APY are they offering on this investment?
(In percent, rounded to 4 decimals.)
Consider an insurance policy that promises to pay the holder $788 per month for the next...
Consider an insurance policy that promises to pay the holder
$788 per month for the next 20 years. The first payment will be one
month after the purchase of the policy. (This type of policy is
called a term annuity.) The appropriate discount
rate is an APR of 8.98%, compounded monthly.
What is the value of this policy?
Round your answer to the nearest dollar.
Consider an insurance policy that promises to pay the holder $972 per month for the next...
Consider an insurance policy that promises to pay the holder
$972 per month for the next 20 years. The first payment will be one
month after the purchase of the policy. (This type of policy is
called a term annuity.) The appropriate discount rate is an APR of
6.52%, compounded monthly. What is the value of this policy? Round
your answer to the nearest dollar.
1) You just purchased an investment at a price of $2500. The investment promises to pay...
1) You just purchased an investment at a price of $2500. The
investment promises to pay $400 in 1 year, $600 in 2 years, $800 in
3 years, $900 in 4 years, and $1200 in 5 years. What rate of return
will you earn on this investment? Express your answers as a
percentage. (Enter only numbers and decimals in your response.
Round to 2 decimal places.)
A. You wish to save $9,000 at the end of 5 years by depositing...
An investor pays $200/month into a real estate investment that promises to pay 7% annually, compounding...
An investor pays $200/month into a real estate investment that
promises to pay 7% annually, compounding monthly. If investor pays
into this for 4 years, what’s his value in 4 years?
10,735.02 8,352.19 887.98 11,041.75
An investor pays $200/month into a real estate investment that promises to pay 7% annually, compounding...
An investor pays $200/month into a real estate investment that
promises to pay 7% annually, compounding monthly. If investor pays
into this for 4 years, what’s his value in 4 years?
A.10,735.02
B.8,352.19
C.887.98 1
D.1,041.75
You’ve just won the lottery which promises to pay you $5,000 per month for the next...
You’ve just won the lottery which promises to pay you $5,000 per
month for the next 30 years, starting in one month. The lottery
company is require to buy US Treasury securities to guarantee that
it can meet its obligation to you. If Treasury securities earned 5%
APR compounded monthly, how much would the lottery company have to
invest today to cover its obligation?
An investment promises to pay you $700 per year starting immediately. The cash flow from the...
An investment promises to pay you $700 per year starting
immediately. The cash flow from the investment is expected to
increase by 3 percent per year forever. If alternative investments
of similar risk earn a return of 8 percent per year, determine the
maximum you would be willing to pay for the investment.
(Round answer to 2 decimal places, e.g. 125.12. Do not
round your intermediate calculations.)
How much would you be willing to pay today for an investment that promises to pay...
How much would you be willing to pay today for an investment
that promises to pay you pay $26,000 in 35 years if your required
return on the investment is 9% per year?
A stock will pay a dividend of $1 in one month and $2 in four months....
A stock will pay a dividend of $1 in one month and $2 in four
months. The relevant risk-free rate of interest based on continuous
compounding is 12%. The current price of the stock is $90.
Determine the arbitrage-free price of (i) a 3 month forward on
a contract and (ii) a six-month forward contract on the stock
Suppose the six-month forward is quoted at $100. Identify any
arbitrage opportunity and explain what trades you would make to
capture it....
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