Equal deposits of $1200 are made at the end of each quarter in an account which earns 7.5% compounded monthly for 17 years. a. State the effective rate for 7.5% compounded monthly to 2 decimal places. b. Using the value you got for part a, state the equivalent nominal rate converted quarterly to 7.5% compounded monthly to 2 decimal places. c. Using the nominal rate from part b, determine the balance of the account at the end of 17 years. d. If no more deposits are made, but the money is left in the account accumulating interest for 19 more years, determine the amount in the account at the end of 36 years. Hint: Use 7.5% compounded monthly.
Equal deposits of $1200 are made at the end of each quarter in an account which earns 7.5% compounded monthly for 17 years. a. State the effective rate for 7.5% compounded monthly to 2 decimal places. b. Using the value you got for part a, state the equivalent nominal rate converted quarterly to 7.5% compounded monthly to 2 decimal places. c. Using the nominal rate from part b, determine the balance of the account at the end of 17 years. d. If no more deposits are made, but the money is left in the account accumulating interest for 19 more years, determine the amount in the account at the end of 36 years. Hint: Use 7.5% compounded monthly.
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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am. 109.
Transcribed Image Text:Equal deposits of $1200 are made at the end of each quarter in an account which earns 7.5% compounded monthly for 17 years.
a. State the effective rate for 7.5% compounded monthly to 2 decimal places.
b. Using the value you got for part a, state the equivalent nominal rate converted quarterly to 7.5% compounded monthly to 2 decimal places.
c. Using the nominal rate from part b, determine the balance of the account at the end of 17 years.
d. If no more deposits are made, but the money is left in the account accumulating interest for 19 more years, determine the amount in the account at the end of 36 years.
Hint: Use 7.5% compounded monthly.
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