4. You want to deposit $600 in a savings account. Account A earns 3.5% simple interest per year. Account B earns 3.3% interest compounded annually. a. Which account should you choose if you invest your money for 3 years? 6 years? Explain. b. After how many years is the balance in Account B greater than the balance in Account A? c. After how many years is the difference between the account balances greater than $5?

4. You want to deposit $600 in a savings account. Account A earns 3.5% simple interest per year. Account B earns 3.3% interest compounded annually. a. Which account should you choose if you invest your money for 3 years? 6 years? Explain. b. After how many years is the balance in Account B greater than the balance in Account A? c. After how many years is the difference between the account balances greater than $5?

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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Question

4. You want to deposit $600 in a savings account. Account A earns 3.5% simple interest per
year. Account B earns 3.3% interest compounded annually.
a. Which account should you choose if you invest your money for 3 years? 6 years? Explain.
b. After how many years is the balance in Account B greater than the balance in Account A?
c. After how many years is the difference between the account balances greater than $5?

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How much would your investment be worth if you deposited $5,555.55 into a bank that paid simple interest of 4% for 10 years?
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You put $8000 into an account earning 3%. After 2 years, you make another deposit into the same account. Seven years later ( that is, 9 years after your original $8000 deposit), the account balance is $21000. What was the amount of the deposit at the end of year 2?
You plan to withdraw the amounts given below over the next five years from a savings account that earns 9% interest compounded annually, how much do you need to deposit now? End of Year 1 $0.00 Year 2 $24,000.00, Year 3 $14,000.00 Year 4 $26,000.00 Year 5 $42,000.00
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1. In a bank account that pays interest 8% p.a, what should you deposit now to have a balance of £900 a year from now? £ 数字 Enter an answer correct to 2 decimal places. 2.a) You deposit £300 into a savings account, which pays compound interest at a rate of 7% per annum. How much money do you have after 3 years? £ 数字 Enter an answer correct to 2 decimal places. b) How many years must you wait to double your capital? 数字 Enter an integer. years
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