2.1.5Since June 30, 2014 Smith has been making deposits of 100 eachinto a bank account on the last day of each month. For all of2014 and 2015 Smith's account earned nominal interest com-pounded monthly at an annual rate of 9%. For the first 9 monthsof 2016 the account earned (12)=.105, and since then the ac-count has been earning (12) = .12.Find the balance in the account on each of the following days:(i) January 1, 2015,(ii) January 1, 2016, and(iii) February 1, 2017Find the amount of interest credited on February 28, 2017.

Explanations: Required (i):The balance on January 1, 2015, would be:= $100 × (1 + 0.09/12)^6 + $100…

Answered: 2.1.5 Since June 30, 2014 Smith has…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in the interest rate cells.) At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8% compounded annually. How much is in the account today? How much would be in the account if the deposits were made at the beginning of each year (PMT Type) than at the end of each year? (Use Future Value of an Annuity) Suppose your opportunity cost (interest rate/year) is 11% compounded annually. How much must you deposit in an account today if you want to pay yourself $230 at the end of each of the next 15 years? How much must you deposit if you want to pay yourself $230 at the beginning of each of the next 15 years? Bruce invested $1,250 (present value - enter as a negative number) 10 years ago. Today, the investment is worth $3,550 (future value). If interest is compounded annually, what annual rate of return did Bruce earn on his investment? (Use Solving for r…
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