2.2. Suppose £5000 is invested for twenty years, if the interest is compounded annually at a nominal rate of 5%, 7% and 10%. K = K (1+7) a. Calculate the amount accumulated at the end of twenty years at 5%? b. Calculate the amount accumulated at the end of twenty years 7%? c. Calculate the amount accumulated at the end of twenty years 10%?

2.2. Suppose £5000 is invested for twenty years, if the interest is compounded annually at a nominal rate of 5%, 7% and 10%. K = K (1+7) a. Calculate the amount accumulated at the end of twenty years at 5%? b. Calculate the amount accumulated at the end of twenty years 7%? c. Calculate the amount accumulated at the end of twenty years 10%?

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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Calculate the future value of $2,000 in a. 3 years at an interest rate of 10% per year. b. 6 years at an interest rate of 10% per year. c. 3 years at an interest rate of 20% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)?
= Calculate the future value of $8,000 in a. Four years at an interest rate of 8% per year. b. Eight years at an interest rate of 8% per year. c. Four years at an interest rate of 16% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? ...
3. 4. How much interest on interest is earned in an account by the end of 5 years if $100,000 is deposited and interest is 4% per year, compounded continuously? How much will be in an account at the end of five years the amount deposited today is $10,000 and interest is 8% per year, compounded semi-annually? Complete the following, solving for the present value, PV: Case A B C Future value $10,000 $563,000 $5,000 Interest Number of rate periods 5% 5 4% 5.5% 20 3 Present value
Assume that time is measured in years. Calculate the total present value at time 0 of a payment of £257 paid at time 4 and a payment of £67 paid at time 12, using an interest rate of 5% per annum effective.
95. Some future amount, F is equivalent to $ 2,000 being received every 6 months over the next 12 years. The nominal interest rate is 20% compounded continuously, what is the value of F? A. $216,403.50 B. $188,324.75 C. $182,502.80 D. $190,607.40
What's the future value of $1,225 after 5 years if the appropriate interest rate is 6%, compounded monthly? a. $1,900.19 b. $1,652.34 c. $1,751.48 d. $1,371.44 e. $1,272.30
D. At a certain interest rate the present values of the following two payment patterns are equal: (i) P 200,000 at the end of 5 years plus P 500,000 at the end of 10 years; (ii) P 400,940 at the end of 5 years. At the same interest rate P 100,000 invested now plus P 120,000 invested at the end of 5 years will accumulate to X at the end of 10 years. Calculate X.
1. Calculate the future value of $500 deposited today at a fixed rate of interest equal to 3.5% per year and left alone for: (Show the formula used to calculate the answers!) a. 5 years b. 10 years c. 15 years d. 20 years
D. At a certain interest rate the present values of the following two payment patterns are equal: (i) P 200,000 at the end of 5 years plus P 500,000 at the end of 10 years; (ii) P 400,940 at the end of 5 years. At the same interest rate P100,000 invested now plus P 120,000 invested at the end of 5 years will accumulate to X at the end of 10 years. Calculate X.
A certain some of money P draws interest compounded continuously. If a certain time there are Po dollars in the account, determine the time when the financial attains the value of 2Po dollars if the annual interest rate at 2%
6.If the current value of $1000 received five years from now is $680.50, what is the assumed annual interest rate? 7.If the current value of $1000 received in each of the next five years starting one year from now is $3889.65, what is the assumed annual interest rate? 8.$1000 is deposited in a bank earning 8% compounded annually. What will be the balance at the end of ten years? What will be the ending balance assuming money is compounded quarterly?
The principal P is borrowed at a simple interest rate r for a period of time t. Find the simple interest owed for the use of the money. Assume 365 days in a year. P = $830, r = 2%, t = 2 years (Round to the nearest cent as needed.)

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