Aziz is planning to attend college when she graduates from high school four years from now. She has made an arrangement with her father to do the household chores if her dad depositsR3570,00 at the end of every six months for the next four years into a bank account. The account pays 8,5% interest per annum, compounded semi-annually. Her father pays and additionalR5 550,00 into the account for every R3 570,00 deposit he makes. The first deposit will be made six months from now. How much money will there be in the account for Aziz to pay for hercollege expenses?A. R12 723,40B. R60 773,69OC. R51 596,74D. R84 786,00

Periodic Amount = 3570+5550 = 9120 Interest Rate = 8.5%/2 = 4.25% per semi annual period Time Period…

Answered: Aziz is planning to attend college when…

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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Amy makes her first $15,000 payment into a conservative savings plan, earning 8% per year into her savings account when she is 28 years old. After the 10th payment, Amy makes no additional payments nor does she withdraw any money from the account. One of Amy's friends, Frank, starts a savings plan that is identical to Amy's when he is 38 years old (Frank's account also earns 8% per year). He continues making $15,000 annual payments until he is 60 years old. If both Amy and Frank retire when they are 60 years old, who will have more money in their savings plan at that time?
A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $900.00, how much money was invested at each rate? How much money was invested in the CD account? (Round to the nearest cent.) GILB
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Heather deposited $1, 700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years?
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Oliver currently has $2,200 in a savings account paying 4.0% interest. He has a goal of taking a year-long around the world vacation. He has decided to deposit $150 from each paycheck (24 a year) for the next two years. Then he will leave on his vacation and withdraw an amount at the beginning of each month while he is on his cruise. How much will he be able to withdraw each month of his voyage?
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Peter makes a deposit at the end of every three months into a savings account that earns interest at 4.6% compounded annually. He saves for 12 years, and then converts his savings into an annuity that pays him $400 at the beginning of each month for 15.5 years at the same interest rate. What size of the deposit Peter makes while he is saving
Ms. Khan is preparing for her daughter's future wedding expenses. Her daughter is currently 15 years old, and Ms. Khan estimates that she will need $80,000 for the wedding when her daughter turns 23. (a) How much will she have to set aside today if the annual interest rate is 5% and the bank compounds it quarterly? (b) How much will she have to set aside today at the same rate if the bank compounds it daily? (c) Explain the difference in your answers above.
Peter makes a deposit at the end of every three months into a savings account that earns interest at 5.8% compounded semi-annually. He saves for 7 years, and then converts his savings into an annuity that pays him $400 at the beginning of each month for 7.5 years at the same interest rate. What size of the deposit Peter makes while he is saving?

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