Questions from General Investment

Q: You invest $1,000 a year for ten years at

You invest $1,000 a year for ten years at 6 percent and then invest $2,000 a year for an additional ten years at 6 percent. How much will you have accumulated at the end of the 20 years?

Q: You are promised $10,000 a year for six years

You are promised $10,000 a year for six years after which you will receive $5,000 a year for six years. If you can earn 8 percent annually, what is the present value of this stream of payments?

Q: A township expects its population of 5,000 to grow annually

A township expects its population of 5,000 to grow annually at the rate of 5 percent. The township currently spends $300 per inhabitant, but, as the result of inflation and wage increments, expects th...

Q: Suppose you purchase a home for $350,000. After

Suppose you purchase a home for $350,000. After making a down payment of $50,000, you borrow the balance through a mortgage loan at 8 percent for 20 years. What is the annual payment required by the m...

Q: You have an elderly aunt, Aunt Kitty, who has just

You have an elderly aunt, Aunt Kitty, who has just sold her house for $365,000 and entered a retirement community that charges $100,000 annually. If she can earn 6 percent on her funds, how long will...

Q: Investor A buys 100 shares of SLM Inc. at $35

Investor A buys 100 shares of SLM Inc. at $35 a share and holds the stock for a year. Investor B buys 100 shares on margin. The margin requirement is 60 percent, and the interest rate on borrowed fund...

Q: A widower currently has $107,500 yielding 8 percent annually

A widower currently has $107,500 yielding 8 percent annually. Can he withdraw $18,234 a year for the next 10 years? If he cannot, what return must he earn in order to withdraw $18,234 annually?

Q: A saver places $1,000 in a certificate of deposit

A saver places $1,000 in a certificate of deposit that matures after 20 years and that each year pays 4 percent interest, which is compounded annually until the certificate matures. a) How much intere...

Q: At the end of each year a self-employed person deposits

At the end of each year a self-employed person deposits $1,500 in a retirement account that earns 7 percent annually. a) How much will be in the account when the individual retires at the age of 65 if...

Q: A saver wants $100,000 after ten years and believes

A saver wants $100,000 after ten years and believes that it is possible to earn an annual rate of 8 percent on invested funds. a) What amount must be invested each year to accumulate $100,000 if (1) t...