Which grows at annualized rate

Assignment Help Financial Management

Reference no: EM131049620

1. What is the value of an account ten years from now, which has an opening balance of $500, to which you contribute $50 per month, and which grows at a 7.5% annualized rate?

2. Given the answer in Q1, above, if you reinvest the amount into an annuity paid out over four years, how much will your payment be, assuming it carries a guaranteed 4% annualized interest rate, and that it is paid at the beginning of each period? Select the CLOSEST answer.

a. $175.00

b. $200.00

c. $225.00

d. $250.00

Reference no: EM131049620

Questions Cloud

Financial statements that have varying capital structures : Find two different financial statements that have varying capital structures. Write a paragraph about each that explains the debt-equity relationship and that computes the percent of debt and the percent of equity represented. Also note whether the p..

What is the firms weighted average cost of capital : Jemisen's firm has expected earnings before interest and taxes of $1,400. Its unlevered cost of capital is 15 percent and its tax rate is 35 percent. The firm has debt with both a book and a face value of $2,000. This debt has a 7 percent coupon and ..

Considering an investment project-initial investment : Your Company is considering an investment project that has the following information: Initial investment (machine one) = $ 15,000,000. The machine one will be depreciated by MACRS 3-year rates. The machine one requires initial net operating working c..

Relevant nonzero key rate durations for the entire portfolio : Key rate duration I have a portfolio of two fixed rate bonds. Bond A is a 2 year, $100 par value US govt bond, coupon=5% (per annum), payable annually. Bond B is a 4 year, $100 par value US govt bond, coupon=6% (per annum), payable annually. What are..

Which grows at annualized rate : What is the value of an account ten years from now, which has an opening balance of $500, to which you contribute $50 per month, and which grows at a 7.5% annualized rate? Given the answer in Q1, above, if you reinvest the amount into an annuity paid..

Theoretical astrophysics and stochastic calculus : You have a 3-year old child, who appears to be brilliant. You think she will clearly get a scholarship to Cal Tech when she graduates high school 12 years from now, where she will get a BA in theoretical astrophysics and stochastic calculus. But, jus..

Cost of equity dcf : Cost of Equity: DCF, Summerdale Resort’s common stock is currently trading at $36 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year (D1 =$3.00), and the dividend is expected to grow at a constant rate of 5% a ye..

Orders product from supplier : Malone Corporation orders product from a supplier. Malone has a demand of 4,500 units per year of the product. The order cost that Malone pays each time it places an order is $250. The holding cost per unit per year for the product is $80. What is th..

User Account

All Pages