24. A three-year CD offers a stated annual interest rate of 10 percent compounded quarterly. Given an initial investment of $80,000, which of the following is most likely to be the value of the CD at maturity? A. $86,151. B. $86,628. C. $107,591.
Bid # 1: 9% per year, compounded quarterly Bid # 2: 3% per quarter, compounded quarterly Bid # 3: 8.8 % per year, compounded monthly a) Determine the effective interest rate for each bid on the basis of semiannual payments, and construct cash flow diagrams for each bid rates b) What are the effective annual rates? These are to be a
balance. This particular card charges interest at a rate of 18% compounded monthly. You are able to make a payment of $200 one month from today and $300 two months from today. Find the amount you will have to pay three months from today to completely pay off the credit card debt. - - - - - - - - - - - 2-8
Compounding Periods and the Time Value Formulas Each of the time value formulas contains an interest rate,k, and a number of time periods or payments, n. In using the formulas, the time periods must be compounding periods, and the interest rate must be the rate …
9. Find the future value of an annuity due if payments of $500 are made at the beginning of each quarter for 7 years, in an account paying 6% compounded quarterly. 10. A 45 year-old man puts $2500 in a retirement account at the end of each quarter until he reaches the age of 60, then makes no further deposits. If the account pays 6% interest ...
MATH 1324 Review for Final Examination
Interest is compounded annually, unless otherwise indicated. 10) R = $100, i = 4 % interest compounded annually for 10 years 10) 11) R = $2500, i = 6.9 % interest compounded quarterly for 16 years 11) Find the final amount (rounded to the nearest dollar) in this retirement account, in which the rate of return on the
A sum of $1000 is invested at an interest rate of 4.1% per year. Find the time required for the amount to grow to $4000 if interest is compounded continuously. 20. Find the time required for an investment of $5000 to grow to $8000 at an interest rate of 7.5% per year, compounded quarterly. 21. A sum of $1000 is invested for four years, and the ...
If the interest rate is 6% compounded quarterly, how long (number of quarters) does it take to earn $100 interest on an initial deposit of $300? Solution i = 6%/4 = 1½% 400 = 300(F/P, 1½%, n) (F/P, 1½%, n) = 400/300 = 1.333 From the 1½% table n = 20 quarters 3-7 The amount of money accumulated in five years with an initial deposit of $10,000, if the account earned 12% compounded monthly ...
interest is compounded quarterly and you withdraw your money after 10 months, you will have received 3 of the 4 quarterly compound interest payments and have a total of 10,000 ( 1 + ____0.05 4) 3·1 ≈ $10,379.70. However, if interest is compounded semi-annually, then after 10 months you will have received 1 of 2 semi-annual compound
5) What principal will amount to S2500 if invested at 5% interest compounded semiannually for 7.5 years? 6) What principal will amount to S1750 if invested at 3% interest compounded quarterly for 5 years? 7) A thousand dollars is left in a bank savings account drawing 7% interest, compounded quarterly for 10 years. What is the balance at the ...
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