A local bank is running the following advertisement in the newspaper: "For just $3,000, we will pay you $240 forever!" The fine print in the ad says that for a $3,000 deposit, the bank will pay $240 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment)?
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- A local bank is running the following advertisement in the newspaper: "For just $5,000 we will pay you $400 forever!" The fine print in the ad says that for a $5,000 deposit, the bank will pay $400 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment)? 20 2021 The interest rate the bank is advertising is %. (Round to the nearest integer.) 2021- Scree 2021-12. Screen 2021-12 O Time Remaining: 00:28:45 Next 11 DIIA local bank is advertising that you can double your money in eleven years if you invest with them. What simple interest rate is the bank offering?A local bank will pay you $135 a year for your lifetime if you deposit $3,000 in the bank today. If you plan to live forever, what interest rate is the bank paying? Note: Enter your answer as a percent rounded to 2 decimal places. Interest rate %
- A bank will pay you $100 a year for your lifetime if you deposit $2,500 in the bank today. If you plan to live forever, what interest rate is the bank paying?An investor has accumulated $6,800 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 5%. A one-year bank certificate of deposit will pay 7%, but the minimum investment is $9,800. Required: Calculate the amount of return the investor would earn if the $6,800 were invested for one year at 5%. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 15%, and then $9,800 were invested for one year at 7%. Calculate the net rate of return on the investment of $6,800 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places.A local bank advertises the following deal: "Pay us $100 at the end of each year for 10 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever." a. Calculate the present value of your payments to the bank if the interest rate is 6%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the present value of a $100 perpetuity deferred for 10 years if the interest rate is 6%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
- A local bank advertises the following deal: Pay us $100 at the end of each year for 10 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever. a. Calculate the present value of your payments to the bank if the interest rate is 8.75%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b. What is the present value of a $100 perpetuity deferred for 10 years if the interest rate is 8.75%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value c. Is this a good deal? No YesA local bank advertises the following deal: "Pay us $100 at the end of each year for 10 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever." a. Calculate the present value of your payments to the bank if the interest rate is 6%. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value b. What is the present value of a $100 perpetuity deferred for 10 years if the interest rate is 6%? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value c. Is this a good deal? Yes NoPlease provide the steps to solving this problem using a financial calculator: You just opened a brokerage account, depositing $3,500. You expect the account to earn an interest rate of 9.652%. You also plan on depositing $4,500 at the end of years 5 through 10. What will be the value of the account at the end of 20 years, assuming you earn your expected rate of return?
- You deposit $4,000 today in a bank that promises to pay an annual interest of 8%? What is future value of this sum at the end of 12 years? b. What if the bank pays 8% interest compounded monthly? What if the bank pays 8% interest compounded quarterly? What interest will the bank have to pay if the future value has to be $12,000 at the end of 12 years? d. Using information from (la) only, what quarterly compounded interest rate should the bank quote in order to provide the same interest as the 10% annual rate? What should be the quoted continuously compounded rate if it is to be the same as the 10% annual rate? Provide the rates per annum. What is the APR? Do we use APR or EAR when we are calculating the present а. с. е. value of an investment?Grand Opening Bank is offering a one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for $800 today, which the bank will compound at 5.5% for the next ten years. The savings bond must be held for at least five years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each cash-in date up through year ten? An investor has accumulated $4,450 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 9%. A one-year bank certificate of deposit will pay 11%, but the minimum investment is $7,450. Required: a. Calculate the amount of return the investor would earn if the $4,450 were invested for one year at 9%. b. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 19%, and then $7,450 were invested for one year at 11%. c. Calculate the net rate of return on the investment of $4,450 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places. a. Amount of return b. Net amount of return c. Net rate of return %