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1. Tucker deposits $7,400 in an account that pays 3.15% simple interest. He keeps the money in the account for five years, but doesn't make any deposits or withdrawals. How much interest will he receive after the five years? I= P=7400 v=0.0315 I=(1400)(0.0315)(5) I=1.165.50 t=5

1. Tucker deposits $7,400 in an account that pays 3.15% simple interest. He keeps the money in the account for five years, but doesn't make any deposits or withdrawals. How much interest will he receive after the five years? I= P=7400 v=0.0315 I=(1400)(0.0315)(5) I=1.165.50 t=5

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1. Tucker deposits $7,400 in an account that pays 3.15% simple interest. He keeps the money in the account for five years, but doesn't make any deposits or withdrawals. How much interest will he receive after the five years? I= P=7400 v=0.0315 t=5 2. Wilson estimates that it will cost $85,000 to send his two year old son to ASU in 16 years. He currently has $9,000 to deposit in an account. What simple interest rate would he need so that $9,000 grows into $85,000 in 16 years? Round to the nearest percent. 85000 76000=(9000)(r)(16) 9000 76000 I=76000 p=9000 Y=? t=16 I=(1400)(0.0315)(5) I=1.165.50 A= Pert A = amount P= Principal e=constant r=rate of Interest S4 76000 = 144000r 14400 144000 3. How long will it take $7,000 to double in an account that pays 2.8% simple interest? Round to the nearest year. 7000=6000) (0.028)(€) 1-7000 P= 7000 v=0.028 t= 7000=196t 196 196 36-t 4. If you deposit $20,000 at 4.56% simple interest, what would your ending balance be after six years? 4.56 A = 20000 e^ (00466) (6) 100 0.0456 7-811 A= Pert PE 20 000 -=0,0456 (= 6 T-20000)(0.045616) 20000 (0.04565 (6) 57
Transcribed Image Text:1. Tucker deposits $7,400 in an account that pays 3.15% simple interest. He keeps the money in the account for five years, but doesn't make any deposits or withdrawals. How much interest will he receive after the five years? I= P=7400 v=0.0315 t=5 2. Wilson estimates that it will cost $85,000 to send his two year old son to ASU in 16 years. He currently has $9,000 to deposit in an account. What simple interest rate would he need so that $9,000 grows into $85,000 in 16 years? Round to the nearest percent. 85000 76000=(9000)(r)(16) 9000 76000 I=76000 p=9000 Y=? t=16 I=(1400)(0.0315)(5) I=1.165.50 A= Pert A = amount P= Principal e=constant r=rate of Interest S4 76000 = 144000r 14400 144000 3. How long will it take $7,000 to double in an account that pays 2.8% simple interest? Round to the nearest year. 7000=6000) (0.028)(€) 1-7000 P= 7000 v=0.028 t= 7000=196t 196 196 36-t 4. If you deposit $20,000 at 4.56% simple interest, what would your ending balance be after six years? 4.56 A = 20000 e^ (00466) (6) 100 0.0456 7-811 A= Pert PE 20 000 -=0,0456 (= 6 T-20000)(0.045616) 20000 (0.04565 (6) 57
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