2019-01-25T09:44:22+00:00 Assignments

# Juan and Rachel Burpo plan to buy a time-share in six years of \$16,860. In order to have adequate funds to do so, the Burpo want to make a deposit to their money market fund today. Assume that they will be able to earn an investment rate of 5.75%, compoun

This paper concentrates on the primary theme of Juan and Rachel Burpo plan to buy a time-share in six years of \$16,860. In order to have adequate funds to do so, the Burpo want to make a deposit to their money market fund today. Assume that they will be able to earn an investment rate of 5.75%, compoun in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 40. For more details and full access to the paper, please refer to the site.

# Economics Computation

Economics Computation

Question: Juan and Rachel Burpo plan to buy a time-share in six years of \$16,860. In order to have adequate funds to do so, the Burpo want to make a deposit to their money market fund today. Assume that they will be able to earn an investment rate of 5.75%, compounded annually. How much will Juan and Rachel need to deposit today to achieve their goal? (Round off to the nearest dollar.)

How do you compute the compounded annually?

Sample Ans

FV=16,860

n=6

r=5.75%

PV= 16,860/1.0575^6

PV=\$12,055

Question How much will \$100 grow to if invested at a continuously compounded interest rate of 10.75% for 8 years?

Sample ans

The Time Value of Money

FVN=PVersN

The term e r s   N

is the transcendental number e ≈ 2.7182818 raised to the power rsN. Most financial calculators have the function ex.

(Institute 287)

Institute, CFA. 2016 CFA Level I Volume 1 Ethical and Professional Standards and Quantitative Methods. CFA Institute, 07/2015. VitalBook file.

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