Two investment accounts

Assignment Help Financial Management
Reference no: EM131981792

You have your choice of two investment accounts. Investment A is a 9-year annuity that features end-of-month $2,800 payments and has an interest rate of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 9 percent, also good for 9 years.

Required:

How much money would you need to invest in B today for it to be worth as much as Investment A 9 years from now? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Present value $

Reference no: EM131981792

Questions Cloud

Chi-square goodness-of-fit test and homogeneity test : What is the difference between a chi-square goodness-of-fit test and homogeneity test?
What is the protectionism : What is protectionism? The U.S., under Donald Trump's, is conducting more protectionist strategies? Provide a one example that supports this statement.
How englehardts concept of victory culture been reflected : Write 200 to 250 words per essay. How has Englehardt's concept of victory culture been reflected in war toys, films & TV series since WWII?
Contingency table for injuries in the united states : A contingency table for injuries in the United States, by circumstance and gender, is as follows. Frequencies are in millions.
Two investment accounts : You have your choice of two investment accounts. How much money would you need to invest in B today for it to be worth as much as Investment A 9 years from now?
What average raise the labor force earned : What average raise the labor force earned over 1950 to current time?
Analyze what is the books argument-thesis-main point : Analyze What is the book's argument/thesis/main point? Is the argument/thesis/main point convincing? How does the author substantiate their claims?
Calculate fair price for six month forward contract : calculate a fair price for a six month forward contract.
Describe each of the given channels : MamaBear (fictional), a designer and manufacturer of baby carriers and strollers, would like to roll out a social media strategy and has hired you to consult.

Reviews

Write a Review

Financial Management Questions & Answers

  Which one of two mutually exclusive machines

For a MARR of 12%, which one of the two mutually exclusive machines should be selected?

  Tax perspective when he exercises the option

What, if anything happens to Gates from a tax perspective when he exercises the option?

  What is value of your retirement plan

Future Value of Multiple Annuities Assume that you contribute $240 per month to a retirement plan for 20 years. Then you are able to increase the contribution to $340 per month for another 20 years. Given a 8.0 percent interest rate, what is the valu..

  Yield to maturity-what is their nominal yield to maturity

What return should investors expect to earn on these bonds? What is their nominal yield to maturity?

  Budget cutback management

The city also does not currently allow any advertisements on busses/stations and vending options on transit stations. What part of the budget would you first ex

  What rate of return will investor expect to receive on stock

Sweet Pea, Inc. has just issued nonconvertible preferred stock with a par value of $100 and an annual dividend rate of 15.23 percent. The preferred stock is currently selling for $98.11 per share. What rate of return will the investor expect to recei..

  Changes in the net working capital

Changes in the net working capital: A. can affect the cash flows of a project every year of the project's life. B. only affect the initial cash flows of a project. C. are included in project analysis only if they represent cash outflows. D. are gener..

  What percentage of firm assets does firm finance using debt

Use this data table of Campbell Industries liabilities and owners' equity to complete parts a and b. What percentage of the firm's assets does the firm finance using debt (liabilities)?  If Campbell were to purchase a new warehouse for $1.3 million a..

  Describe two of the biggest challenges facing financial

discuss two of the biggest challenges facing financial managers today. one of the articles should be about the

  The dividend paid this year on share of common stock

The dividend paid this year on a share of common stock is $10. If dividends grow at a 5% rate for the foreseeable future, and the required rate of return is 10%, what is the value of the stock today? Please show all work, including formula used.

  Overview to make corporate finance decisions

Final Project Part III Part III Overview To make corporate finance decisions, take an advanced finance course, or pursue a career in finance, you will need to understand basic concepts. This includes going beyond the number crunching and reading grap..

  Sell convexity-which bond will be preferred by investors

Suppose bonds Y and Z are identical in terms of duration and coupon but bond Z is more convex. Market participants expect interest rates to fall sharply. Which bond will be preferred by investors? Which bond will have a higher required yield? How muc..

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!

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