Consider bringing as many cash flows

Assignment Help Financial Management

Reference no: EM131526539

Suppose you need to have $40,000 to buy a new car in 8 years. You plan to raise this amount by investing $3,000 this year, $1,000 next year and then an equal amount each year from years 4 to 7. Solve for the unknown amount you need to invest each year in years 4 to 7 if you expect to earn 7%. (HINT: Consider bringing as many cash flows as you can to the same point in time). ON EXCEL

Reference no: EM131526539

Questions Cloud

What is your portfolio dollar return and percentage return : What is your portfolio dollar return and percentage return?

What is the standard deviation of the stocks returns : What was the stock’s return for the missing year? What is the standard deviation of the stock’s returns?

What is the present value of the liability : If the appropriate discount rate is 8 percent, what is the present value of the liability?

Calculate the future value-earn an annual interest rate : Calculate the future value of $1,000, given that it will be held in the bank for 7 years and earn an annual interest rate of 7 percent

Consider bringing as many cash flows : Consider bringing as many cash flows as you can to the same point in time

Present-value comparison : Assuming that you can earn 12 percent on your money, which should you choose?

What was his rate of return : What was his rate of return, that is, the value of i? What was Lance Murdock's rate of return, that is, the value of i?

Regressing currency fluctuations on inflation differentials : Relative PPP can be tested by regressing currency fluctuations on inflation differentials.

Pound and dollar denominated rates of return : Calculate the standard deviation of both the pound and dollar denominated rates of return if each of the nine outcomes is equally likely.

User Account

All Pages