User Account

All Pages

Determine the monthly deposit size required to reach

Assignment Help Finance Basics
Reference no: EM132678991

You have the opportunity to join a syndicate which intends to search for the lost treasure of the Egyptian Pharaoh, Tutem K'Moon. To join this syndicate you will need to have saved $50,000 in eighteen (18) months. You plan on doing this by making regular monthly deposits of the same size into a savings account, starting in one month's time. The savings account pays interest j12 = 7.50% p.a.

-a) Illustrate this scenario as a fully labelled time line diagram.

-b) Determine the monthly deposit size required to reach your goal.

-c) Explain and perform a sanity check on your answer to (b)

-d) During the sixth month you lose your wallet. If you can't find it, you can't make your sixth deposit. If you can't make your sixth deposit [but can make deposits 7 to 18 of the size you found in part (b)], determine how much you will have accumulated in your savings account by the end of the 18th month. Determine how far short you would fall of your target.

-e) You find your wallet and don't miss the sixth deposit. Immediately after your 8th deposit, the interest rate increases to j12=7.68 % p.a. Determine what deposit size will now be needed for deposits 9 to 18 in order to still meet your original target of $50000. Describe and perform a sanity check on your answer.

Reference no: EM132678991

Questions Cloud

Discuss the relationship between gender and selected topic : The research paper should show a comprehension and analysis of the course readings and course objectives. For the research paper, you will need to select.
Review of current homeland security event : This assignment is a review of a current homeland security event. Analyze the event based on the material covered so far in class.
Calculate the minimum interest rate : You have a choice between receiving $450 now or $470 in six months' time. Current interest rates are 10% p.a. (simple interest).
How do abductees inhabit a different reality : Filmed in the mid 1998s, this documentary was created during the "peak" of American interest in UFO abductions (during the same time Susan Lepselter conducted.
Determine the monthly deposit size required to reach : You have the opportunity to join a syndicate which intends to search for the lost treasure of the Egyptian Pharaoh, Tutem K'Moon. To join this syndicate
Different methods of acquiring information : Various sources require different methods of acquiring information. Discuss various methods of obtaining information from reluctant or fearful victims or witnes
What end of life considerations might be important to you : To think about your own views on how you might prefer to age and what end of life considerations might be important to you.
Expected return and standard deviation of the portfolio : What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds?
Find the interest rate that perpetuity has promised to pay : He received his first payment of $1,000 from the perpetuity 4 years ago. Find the interest rate that the perpetuity has promised to pay.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate x and input answer below

Amelia deposits $X into her bank account today. The money is sufficient to support 20 quarterly withdrawals of $500 starting

  Emergency situations contain potassium superoxide

Of every other reagent Oxygen masks for producing O2 in emergency situations contain potassium superoxide, KO2.

  Cultural lag between technology and ethics

Reasons for cultural lag between technology and ethics include the social structural and market conditions under which each are developed.

  What was the maximum possible loss

What was the maximum possible loss on Alec's long option position? What was the maximum possible gain on Alec's long option position?

  Determine the total amounts of liability and equity

For each year of the project, compute the profit margin and EPS (assuming that the firm has 10,000 shares of stock outstanding).

  Wine and roses inc offers a 80 percent coupon bond with

wine and roses inc. offers a 8.0 percent coupon bond with semiannual payments and a yield to maturity of 8.78 percent.

  Compute the realized rate of return for an investor

Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places.

  What would the annual interest and earnings after taxes

What would the annual interest and earnings after taxes for the conservative and aggressive strategies be if the short-term and long-term interest rates.

  What is odd about setting the price based

Wendel stove company is developing a "professional" model stove aimed at the home market. The company estimates that variable costs will be $2,000 per unit and fixed costs will be $10,000,000 per year.

  How much do the contest sponsors have to deposit in escrow

If the prize money is guaranteed by AAA bonds yielding 4% and is placed into an escrow account when the contest is announced 1 year before the first payment, how much do the contest sponsors have to deposit in the escrow account? (Round your answe..

  What is monthly payment

Bill receives a $9000 loan from his bank. He must make equal monthly payments for four years. The annual interest rate is 6% per year

  Protections afforded to a whistle blower

What are the protections afforded to a whistle blower?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd