Please help with 5-6. 5-6. (Compound value) Stanford Simmons, who recently sold his Porsche, placed$10,000 in a savings account paying annual compound interest of 6 percent.a. Calculate the amount of money that will have accrued if he leaves the moneyin the bank for 1, 5, and 15 years.b. If he moves his money into an account that pays 8 percent or one that pays10 percent, rework part (a) using these new interest rates.c. What conclusions can you draw about the relationship between interest rates,time, and future sums from the calculations you have completed in this problem?

a. Calculating the amount of money accrued at 6% interest:Year 1: $10,000 * (1 + 0.06)^1 = $10,000 *…

Answered: 5-6. (Compound value) Stanford Simmons,…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

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Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
1.) Leslie Mosallam, who recently sold her Porsche, placed RM10,000 in a savings account paying annual compound interest of 6 percent. Calculate: The amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5 and 15 years. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part (a) using 8 percent and 10 percent. What conclusions can you draw about the relationship between interest rates, time and future sums form the calculations you just did?
(Related to Checkpoint 5.2) (Future value) Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual compound interest of 7 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2, 6, and 16 year(s). b. Suppose Leslie moves her money into an account that pays 9 percent or one that pays 11 percent. Rework part (a) using 9 percent and 11 percent. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you just did? a. After placing $10,000 in a savings account paying annual compound interest of 7 percent, the amount of money that will accumulate if Leslie leaves the money in the bank for 2 year(s) is $ (Round to the nearest cent.)
Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual com- pound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5, and 15 years. b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part a using 8 percent and 10 percent. c. What conclusions can you draw about the relationship among interest rates, time, and future sums from the calculations you just did? use EXCEL to work this out and show the formula!
4. Suppose $5,000 is deposited in a savings and loan account that pays 5.5% interest compounded semiannually. Use compound interest to calculate the following:a. How much money will be saved?b. How much will be owed after 2 years?
Using the image attached answer 3, and 4 below. 3) Isaac invested $77.000 in an account paying an interest rate of 4.6% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest cent. would be inthe account after 12 years? 4) Evan is going to invest in an account paying an interest rate of 5.4% campounded annually. How much would Evan need to invest, to the nearest dollar, for the value of the account to reach $1,360 in 5 vears.
5. You take $100 to your local savings bank to invest for five years. You are given the choice of two investments by the banker Notifications Time Left 00:00:28 ? Guide Me 1. You can Invest in a regular savings account that pays you 14.00% interest each year with interest compounded annually. That is each year the interest you can gets deposited in your bank account and earns interest until the end of the five years. it. You can invest in a special account that pays you 20.00% interest each year, the catch is that the interest does not compound, Rattier each year the interest payrrient is put into a special account which collects no further interest and cannot be reinvested anywhere until the end of the five years Which option should you select and why? a, Select Option i: It earns $44.63 more than Optianill b. Both Options earn you the same amount of money so you are indifferent between the two c. Select Option it It earns $7.46 more than Option d. Select Option it It earns $30.00…
12. (14-point) George bought a new car with a 4.1% interest rate for 5 years. The loan amount is $35,000. a. What is the monthly payment on the loan? b. What is the total amount he will pay over the life of the loan? c. How much interest will he pay over the life of the loan? d. What is the interest portion of the 48th payment? e. What is the balance after the 48th payment? f. What is the interest portion of the first 12 payments? g. What is the interest portion of the last 12 payments?
Andrew has purchased a new car. He wishes to set aside enough money in a bank account to pay the maintenance for the first 5 years. It has been estimated that the maintenance cost of a car is given in the table.Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Andrew deposit in the bank now?
Looking for steps on how to solve it using: y=p(1+r/n)^nt
NOTE: STRICTLY USE THE GIVEN FORMULA IN THE PHOTO ATTACHED 1. How much must a man deposit in a bank that pays 7% compounded annually so that after 10 years he will have P3,000,000 2. How much must a corporation deposit in a bank which credits interest at 12% compounded monthly to come up in 8 years with P2,500,000 needed for its expansion program? 3. In purchasing of house, a man makes P720,000 down payment and agrees to pay P1,200,000 5 years later. Find the cash value of the house if money is worth 14% compounded semi-annually. 4. On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded quarterly. How much must he invest if he wants to accumulate P650,000 by the time the child reaches his 21st birthday? 5. To provide for a purchase of a car worth P950,000 as a gift to his mother 5 years from now. How much should Benjamin invest today at 18% compounded quarterly? 6. Mrs. Dela Cruz invested P70,000 at 12% compounded quarterly for 5 years and…
H4. Fred and Ethel are going to take out a business loan on which they will make annual payments of $7,500 for six years. At that point in time they will also pay off the remaining balance which will be $37,155. Their interest rate is 7.6% compounded semiannually. What is the amount that Fred and Ethel borrowed? Please show proper step by step calculation

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