9 Suppose you invested $500 in a local credit union and: ● f(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded quarterly. g(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded monthly. h(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded continuously. a. Write a function rule for f(t). For g(t). For h(t). Then describe how the rules are similar and how they are different. b. Based on your understanding of exponential growth, describe how the graphs of f(t), g(t), and h(t) are similar, and how they are different. c. On the same coordinate grid, use algebraic reasoning to sketch graphs of the three functions.

9 Suppose you invested $500 in a local credit union and: ● f(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded quarterly. g(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded monthly. h(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded continuously. a. Write a function rule for f(t). For g(t). For h(t). Then describe how the rules are similar and how they are different. b. Based on your understanding of exponential growth, describe how the graphs of f(t), g(t), and h(t) are similar, and how they are different. c. On the same coordinate grid, use algebraic reasoning to sketch graphs of the three functions.

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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Find the accumulated value of an investment of $15,000 for 5 years at an interest rate of 1.45% if the money is a. compounded semiannually; b. compounded quarterly; c. compounded monthly d. compounded continuously. Click the icon to view some finance formulas. c. What is the accumulated value if the money is compounded monthly? $ 16127.15 (Round to the nearest cent as needed.). d. What is the accumulated value if the money is compounded continuously? S (Round to the nearest cent as needed.) ▼ X
please step by step solution.
3. *A savings plan requires an investor to pay 10 installments, each one of $500, due at the end of every year for 10 years. One year after the last of such installments the bank will start making annual payments to the investor, each one for a fixed amount P, for n years. Assume an effective interest rate of 5% p.a. (a) If n = 7 determine the value of P. (b) If n = ∞o, i.e. payments from the bank continue indefinitely, determine the value of P.
Example 2.14: Calculating the present value of an annuity due at 12% An investor wants to buy an annuity of R100 for the next three years, each instalment being paid at the beginning of the year. If a bank is prepared to pay interest at 12%, how much must be invested today? It can be seen that the amount will be invested and the first instalment will immediately be repaid. It can be illustrated as shown in Table 2.6. value of an annuity due at 12%
Task: Assume that at time 0 a sum L is lent for a series of n yearly payments. The rth payment, of amount x, is due at the end of the rth year. Let the effective annual interest rate for the rth year be i,. Give an identity which expresses L in terms of the x, and i,. Answer: The identity is [ Select ] [ Select ] L = x_1 (1+i_1)^(-1) + x_2 (1+i_1)^(-1) (1+i_2)^(-2) + .. + x_n (1+i_1)^(-1) (1+i_2)^(-2) ... (1+i_n)^(-n) L = x_1 (1+i_1) + x_2 (1+i_1) (1+i_2) + ... + x_n (1+i_1) (1+i_2) ... (1+i_n) L = x_1 (1+i_1)^(-1) + x_2 (1+i_1)^(-1) (1+i_2)^(-1) + .. + x_n (1+i_1)^(-1) (1+i_2)^(-1) ... (1+i_n)^(-1) Question 3 L = x_1 (1+i_1) + x_2 (1+i_1) (1+i_2)^2 + ... + x_n (1+i_1) (1+i_2)^2 ... (1+i_n)^n
Find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 7% per year. I need to know the value of G.
ربو Suppose an investor will receive payments at the end of the next six years in the amounts shown in the table. 6 248 Ycar 1 5 4 2 3 Payment 465 233 632 365 334 If the interest rate is 3.5% compounded semiannually, what is the present value of the investment?. [Assume the first payment will arrive one year from now].
You are comparing two investments. The first pays 3 percent interest per month, compounded monthly, and the second pays 6 percent interest per six months, compounded every six months. a. What is the effective semiannual interest rate for each investment? b. What is the effective annual interest rate for each investment? c. Based on the interest rates, which investment is preferred? Does the decision depend on whether the comparison is based on an effective six-month rate or an effective one-year rate? a. The effective semiannual interest rate for the first investment is percent. (Type an integer or decimal rounded to two decimal places as needed.)
Double your money-Rule of 72. Approximately how long will it take to double your money if you get an annual return of 4.6%, 7.1%, or 10 4% on your investment? Approximately how long will it take to double your money if you get a 4.6% annual return on your investment? years (Round to two decimal places.)
Question 3) The following questions are related to Continuously Compounded Interest: If you invest $2,000 at an annual interest rate of 8% compounded continuously, calculate the final amount you will have in the account after 20 years. If you invest $10,000 at an annual interest rate of 5% compounded continuously, calculate the final amount you will have in the account after ten years. Question 4) Suppose you want to save $100,000 for a down payment on a house in 15 years. If your savings account earns 9% compounded monthly, how much would you need to deposit now to reach this goal?
Give only typing answer with explanation and conclusion
Problem 1: You can choose between two different investments: (A) an annuity that pays $10,000 each year for the next 6 years; (B) a perpetuity that pays $10,000 forever, starting 11 years from now. 1. Which investment do you choose, A or B, if the interest rate is 5%? What if it is 10%? Explain in words the reason behind your choices.

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