You are planning to buy your dream mansion and for that you have decided to make 3 independent investments with your savings money in the next 44 years. You plan to invest $4,100 at the end of each year for the first 17years, $6,900 at the end of each year for the following 11 years, $14,500 at the end of each year for the last 16 years. You believe you will earn an effective annual rate of return of 9.7% on your investment. If the price of your dream mansion will be $1,000,000 after 44 years, will you be able to fulfill your dream with those 3 investments?

You are planning to buy your dream mansion and for that you have decided to make 3 independent investments with your savings money in the next 44 years. You plan to invest $4,100 at the end of each year for the first 17years, $6,900 at the end of each year for the following 11 years, $14,500 at the end of each year for the last 16 years. You believe you will earn an effective annual rate of return of 9.7% on your investment. If the price of your dream mansion will be $1,000,000 after 44 years, will you be able to fulfill your dream with those 3 investments?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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You are planning to buy your dream mansion and for that you have decided to make 3 independentinvestments with your savings money in the next 44 years. You plan to invest $4,100 at the end of eachyear for the first 17years, $6,900 at the end of each year for the following 11 years, $14,500 at the end ofeach year for the last 16 years. You believe you will earn an effective annual rate of return of 9.7% onyour investment. If the price of your dream mansion will be $1,000,000 after 44 years, will you be ableto fulfill your dream with those 3 investments? (5)
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