Hii expert please given correct answer A local bank is running the following advertisement in thenewspaper: "For just $3,000, we will pay you $240 forever!" Thefine print in the ad says that for a $3,000 deposit, the bank willpay $240 every year in perpetuity, starting one year after thedeposit is made. What interest rate is the bank advertising (whatis the rate of return of this investment)?

Present Value of Perpetuity = Cash Flow/Interest Rate 3,000 = 240/Interest Rate Interest Rate =…

Answered: A local bank is running the following…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

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A local bank is running the following advertisement in the newspaper: "For just $2,000 we will pay you $180 forever!" The fine print in the ad says that for a $2,000 deposit, the bank will pay $180 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)? The interest rate the bank is advertising is %. (Round to the nearest integer.)
I won't to this question answer financial Accounting question
A friend asks to borrow $53.00 from you and in return will pay you $56.00 in one year. If your bank is offering a 5.7% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $53.00 instead? b. How much money could you borrow today if you pay the bank $56.00 in one year? c. Should you loan the money to your friend or deposit it in the bank? a. How much would you have in one year if you deposited the $53.00 instead? If you deposit the $53.00 in the bank today, you will have $ in one year. (Round to the nearest cent.)
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You have just taken out a five-year loan from a bank to buy an engagement ring. The ring costs $6,200. You plan to put down $1,400 and borrow $4,800. You will need to make annual payments of $1,100 at the end of each year. Show the timeline of the loan from your perspective. How would the timeline differ if you created it from the bank's perspective? Show the timeline of the loan from your perspective. (Select the best choice below.) O A. Year 1 2 3 4 Cash Flow $4,800 - $1,100 -$1,100 - $1,100 - $1,100 - $1,100 O B. Year 1 2 3 4 Cash Flow - $1,400 $1,100 $1,100 $1,100 $1,100 $1,100 O C. Year 1 2 3 4 Cash Flow - $4,800 $1,100 $1,100 $1,100 $1,100 $1,100 O D. Year 1 2 3 4 Cash Flow $6,200 - $1,100 -$1,100 - $1,100 - $1,100 - $1,100
A friend asks to borrow $54 from you and in return will pay you $57 in one year. If your bank is offering a 5.7% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $54 instead? b. How much money could you borrow today if you pay the bank $57 in one year? c. Should you loan the money to your friend or deposit it in the bank? a. How much would you have in one year if you deposited the $54 instead? If you deposit the money in the bank today you will have $ in one year. (Round to the nearest cent.)
You are saving to buy a $177,000 house. There are two competing banks in your area, both offering certificates of deposit yielding 6.2 percent. How long will it take your initial $94,000 investment to reach the desired level at First Bank, which pays simple interest? How long will it take your initial $94,000 investment to reach the desired level at Second Bank, which compounds interest monthly?Years to wait at first bank?Years to wait at a second bank?
Suppose someone offered to sell you a note (an investment) that calls for $1,000 payment two years from today. The person offers to sell the note for $880. You have $880 in a bank time deposit (savings instrument) that pays a 6.766492 percent simple rate with daily compounding, which is a 7 percent effective annual interest rate; and you plan to leave this money in the bank unless you buy the note. The note is not risky — that is, you are sure it will be paid on schedule. a. Should you buy the note? Check the decision in three ways: i. by comparing your future value if you buy the note versus leaving your money by comparing the pv of the note with your current bank investments and by comparaing the r earon the note with your current bank
A bank has two options for a certificate of deposit of $4000. Option A has an annual interest rate of 3.5 % compounded quarterly for 3 years. Option B has an annual interest rate of 4 % compounded continuously for 30 months. Which is the better deal? Please set up your formulas, and then you can use a calculator to estimate your solutions.
You plan to invest $10,000 for 180 days. Your bank offers a rate of 2.60% on 90-day GICS and 2.85% on 180-day GICS. How much more interest will you earn if you purchase a single 180-day GIC instead of two consecutive 90-day GICS? Remember that the interest earned from the first 90-day GIC will be invested in the second 90-day GIC along with the principal. Express your answer to 2 decimal places but do not include the $ sign. Your Answer: Answer
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?

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