Ethan invested $2,200 at the beginning ofevery 6 months in an RRSP for 11 years. Forthe first 8 years it earned interest at a rateof 3.50% compounded semi-annually andfor the next 3 years it earned interest at arate of 6.40% compounded semi-annually.a. Calculate the accumulated value of hisinvestment after the first 8 years.Round to the nearest centb. Calculate the accumulated value of hisinvestment at the end of 11 years.Round to the nearest centc. Calculate the amount of interest earnedfrom the investment.

Accumulated amount includes the amount of principal amount deposited and plus interest amount…

Ethan invested $2,200 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 3.50% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.40% compounded semi-annually.

Ethan invested $2,200 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 3.50% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.40% compounded semi-annually.

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

See similar textbooks

Related questions

Q: Freedom Corporation acquired a fixed asset for $230,000. Its estimated life at time of purchase was ...

A: The incremental value for depreciation will be the excess amount of depreciation generated from prop...

Q: National Co. uses about 200,000 yards of a particular fabric each year. The fabric costs P25 per yar...

A: The total annual cost is the cost of all the product cost including fixed and variable both. The dif...

Q: Determine the ordinary and exact simple interests on P 5,000 for the period from Jan. 15 (excluding ...

A: Ordinary simple interest uses 360 days as the no. of days in a year while exact simple interest uses...

Q: Have 2000 $ interest rate 4% /year for 5 years what is the money you get in the end

A: Future value = Present value x (1 + r)n where, Present value = 2,000 Interest rate (r) = 0.04 Number...

Q: Parker borrowed $283,000 at 7.5% compounded quarterly to finance the purchase of a pizza franchise. ...

A: The loan which is discharged by making installment payments consist of two components as interest mo...

Q: . A manufacturer has been shipping his product (moderately heavy machines). mounted only on skids wi...

A: Opportunity costs are readily neglected because they are, by definition, invisible. Acknowledging th...

Q: Consider the following balance sheet for ABC Company (in millions): Liabilities and Equity l-year fi...

A: Net interest income refers to difference between the interest income generated and interest expenses...

Q: 1. Your parents wanted to establish a travel fund that will provide them an annual traver allowance ...

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at tim...

Q: Assume that Monsanto Corporation is considering the replacement of some of its older and outdated ca...

A: Marginal analysis is done to understand the additional benefit the project will have compared to the...

Q: Maintenance costs stuff on equipment is 20,000 pesos a year for two years, 40,000 pesos at the end o...

A: Note : It is assumed that semi annual payments are made till the end of 8 years. Present Value refer...

Q: Assume that you are about to sell property (a vacant parcel of real estate) you own but otherwise ha...

A: Here, Selling price for the property = $410,000 Rate of interest = 11% Number of years = 20 years To...

Q: On March 1, 2020 Giant Jumbo Clown Costumes borrowed money from Second Friendly National Bank by iss...

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for yo...

Q: Jana wants to have 52000 in her bank after 13 years. how much should she deposit if the money is wor...

A: Amount needed in 13 years (F) = 52000 n = 13 years r = 15% compounded continuously Let the deposit =...

Q: Stock market analyst. Explain Types of share analysis to value a stock.

A: Stock market analysis is the method used by traders or investors for analyzing the decisions related...

Q: Explain what is the risk component of financial assets.

A: Risk can be described as the likelihood of an unexpected or negative outcome. Any act or activity th...

Q: 12. Nominal versus Real Returns Say you own an asset that had a total return last year of 12.1 perce...

A: Nominal rate = 12.1% Inflation rate = 3.4% Real rate of return = [(1 + Nominal rate)/(1 + Inflat...

Q: You plan to borrow P10,000 from your bank, which offers to lend you the money at a 7.5% nominal rate...

A: Discount rate = 7.5%

Q: Why is financial topic a taboo among parents and children?

A: Financial statements refer to the statements which shows the revenue earned by the company during a ...

Q: Natsam Corporation has $268 million of excess cash. The firm has no debt and 481 million shares outs...

A: The profits of the company refers to the income generated by the company and is left with the compan...

Q: A portfolio is efficient if no other asset or portfolios offer higher expected return with the same ...

A: Solution: Efficient Portfolio is that portfolio out of the feasible portfolios, which has higher ret...

Q: A company plans to add an additional production line at an initial cost of $ 1,250,000 that will giv...

A: Initial Investment $ 12,50,000.00 Gross Savings $ 10,00,000.00 Annual operating cost $ 2,50...

Q: he firm is contemplating the following (base case): Vehicle acquisition cost ...

A: ROE that is return on equity shows the profit available for common stockholders of the corporations ...

Q: How much must be invested now at 6% interest, compounded monthly, to accumulate $1,000 at the end of...

A: Present value = Future value/(1 + r)n OR Present value = Future value x (Present value facto...

Q: BASIC (Questions 1-17) 1. Interpreting Bond Yields Is the yield to maturity on a bond the same thing...

A: Yield to maturity is referred as the total return, which are anticipated on the bonds when the bond ...

Q: ony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds...

A: Par Value = $1,000 Time period = 10 years Coupon payment = $45 Present value of bond = $937.79

Q: Question 3, Warm-Up 1-3 Media Ltd. announced that the profit for the previous year is twice the amou...

A: It is quite possible that a profitable company has insufficient cash flows.

Q: The zero growth model of stock valuation;

A: The zero growth model is a type of dividend discount model.

Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you i...

A: Simple interest per month is calculated at: = Principal * rate of interest * 1/12

Q: What type of model is this showing?

A: Valuation models: There are three models that investors can employ to determine the intrinsic value ...

Q: B. Complete the table for a compound interest involving P 40 000 loaned for a period of 5 years with...

A: Starting principal = Php 40000 r = 6% In compound interest, interest is applied on the interest plus...

Q: The following data refer to various annual costs relating to the inventory of a single-product compa...

A: Carrying costs are one of the most significant inventory management difficulties that businesses fac...

Q: The future value of this cash flow would be the present value of this cash flow, assuming i = 2% A$1...

A: Future value = [Cash flow year 0 x (1 + r)3] + [Cash flow year 1 x (1 + r)2] + Cash flow year 3 ...

Q: a couple has 25,000 in their retirement savings today. How many years do they have to save at 6%, pu...

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at tim...

Q: Suppose you are planning to save BDT 2,000 at the beginning of each of the next 10 years with 12% in...

A: Annuity due is a term which describes a series or payments or savings which are equal at the beginni...

Q: What is the present worth of the three approaches? What is the present worth over 30 years?

A: Since you have asked a total of 6 multiple part question, we have solved the first three for you. Pl...

Q: Question 10 OPS Invest PLC issues a 4-year maturity 9% Coupon Bonds to finance a sustainable solar e...

A: Bonds are one of the methods used by the government and corporate units to raise funds from the publ...

Q: suppose a stock worth $50 today is equally likely to be worth $100 or $25 a year from today. What is...

A: Stock Worth = $50 Equally worth stock $100 or $25 Highest price = $100 Lowest price = $25 Probabili...

Q: 1. Differentiate the two main subdivisions of the Philippine Financial System. 2. Discuss the elemen...

A: "Since you have asked multiple question we will be solving First question for you if you want any sp...

Q: Q16. Use the following information to calculate the net liquid balance: Cash and equivalents $10 Ac...

A: 16) Cash and equivalents = $10 Notes payables = $25

Q: A bond promises to you 7000 in 10 years. If you are able to earn 6 percent on securities of equal r...

A: Future Value = 7000 N = 10 Rate = 6%

Q: Based on quarterly compounding, what would be yield-to-maturity (YTM) be on a 12-year, zero-coupon, ...

A: Given Information : Par value of Bond = $1000 Current traded price = $456.78 Number of years to mat...

Q: Suppose that $1,000 is invested for 4 years at an interest rate of 12%, compounded quarterly. How mu...

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified...

Q: The report should contain the following : -Introduction about the banks -Reasons for merger - Advant...

A: The bank is a financial institution that helps in wealth creation through investments. Also, banks h...

Q: Question 6 Shayma Bank PLC Bond has a Par Value of $1,000 and a coupon of $135. The Shayma Bank PLC ...

A: Par value of bond (FV) = $1000 Coupon amount (C) = $135 Bond price (P) = $900

Q: Make a personal assessment of any government bank in the Philippines.

A: A financial institution (FI) is a company that deals with financial and monetary transactions such d...

Q: The probability of losing investment in a foreign country is known as: O confiscation O political ri...

A: Investment made in foreign countries outside jurisdiction of domestic country is subject to risk.

Q: Current Prior Year Year Total Assets $ 2,731,792 $ 2,580,708 Total Liabilities $ 867,106 $ 957,022 T...

A: There is impact of capital structure of company on the earning of the company and valuation of the c...

Q: Janice opened a franchise short of Krispy Kreme Doughnuts in her hometown. She has been working real...

A: Here we will look at the relevant costs. In finance relevant costs are those costs that will change ...

Q: A stock's beta is more relevant as a measure of risk to an investor who holds only one stock than to...

A: Beta- A Beta os stock measures the volatility of the underlying stock in comparison to the market. B...

Q: Explain and evaluate how the primary of objective in financial management of maximizing shareholder ...

A: Financial management is a business function that deals with the sourcing and acquisition of finances...

Question

Ethan invested $2,200 at the beginning of
every 6 months in an RRSP for 11 years. For
the first 8 years it earned interest at a rate
of 3.50% compounded semi-annually and
for the next 3 years it earned interest at a
rate of 6.40% compounded semi-annually.
a. Calculate the accumulated value of his
investment after the first 8 years.
Round to the nearest cent
b. Calculate the accumulated value of his
investment at the end of 11 years.
Round to the nearest cent
c. Calculate the amount of interest earned
from the investment.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Brian opened an RRSP account and deposited $3,300 into it. He then deposited $800 at the end of the 1st year and $625 at the end of the 2nd year, into the account. The RRSP was earning 3.20% compounded quarterly. a. What is the accumulated value of the investments at the end of the 2nd year? Round to the nearest cent b. What is the accumulated value of the investment at the end of 5 years? Round to the nearest cent
Abigail invested $1,700 at the beginning of every 6 months in an RRSP for 11 years. For the first 7 years it earned interest at a rate of 3.20% compounded semi-annually and for the next 4 years it earned interest at a rate of 6.50% compounded semi-annually. a. Calculate the accumulated value of his investment after the first 7 years. Round to the nearest cent b. Calculate the accumulated value of his investment at the end of 11 years. Round to the nearest cent c. Calculate the amount of interest earned from the investment. Round to the nearest cent
Diana invested $1,500 at the beginning of every 6 months in an RRSP for 11 years. For the first 5 years it earned interest at a rate of 3.70% compounded semi-annually and for the next 6 years it earned interest at a rate of 5.30% compounded semi-annually. a. Calculate the accumulated value of her investment after the first 5 years. $0.00 Round to the nearest cent b. Calculate the accumulated value of her investment at the end of 11 years. $0.00 Round to the nearest cent c. Calculate the amount of interest earned from the investment. $0.00 Round to the nearest cent
Shannon invested $1,900 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 3.70% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.20% compounded semi-annually. a) a. Calculate the accumulated value of her investment at the end of the first 8 years. $55,140.60 $55,522.54 $35,005.05 $35,652.65 b) b. Calculate the accumulated value of her investment at the end of 11 years. $55,140.60 $55,522.54 $48,355.47 $35,652.65 c) c. Calculate the amount of interest earned from the investment. $13,722.54 $13,340.60 $12,419.72 $1,302.82
Morgan opened an RRSP account and deposited $2,800.00 into it. She then deposited $900.00 at the end of the 1st year and $575.00 at the end of the 2nd year, into the account. The RRSP was earning 2.20% compounded quarterly. What is the accumulated value of the investment at the end of 8 years Round to the nearest cent
Miguel invested $1,900 at the beginning of every 6 months in an RRSP for 11 years. For the first 4 years it earned interest at a rate of 4.60% compounded semi-annually and for the next 7 years it earned interest at a rate of 5.10% compounded semi-annually.a. Calculate the accumulated value of her investment at the end of the first 4 years.A. $55,478.69B. $56,281.73C. $16,481.53D. $16,860.61b. Calculate the accumulated value of her investment at the end of 11 years.A. $55,478.69B. $56,281.73C. $49,155.52D. $16,860.61c. Calculate the amount of interest earned from the investment.A. $14,481.73B. $13,678.69C. $8,786.82D. $5,694.91
Zachary deposited $1,200 at the end of every month into an RRSP for 6 years. The interest rate earned was 3.50% compounded semi-annually for the first 4 years and changed to 3.75% compounded monthly for the next 2 years. What was the accumulated value of the RRSP at the end of 6 years? Round to the nearest cent
Ali invested 5000 Rials in a saving account that paid quarterly interest. After 6 years the money had accumulated to 6539.96 Rials. What was the annual interest rate? of estion Select one: O a. 2.87% O b. 4.57% O c. 5.74% O d. 14.3% O e. 4.5% O f. 0.0457% g. 0.045% O h. 0.287% ENG INTL
businessman invested P1,000.00 and after 4 years, it becomes P1,608.44 when he investedat a certain rate of interest compounded bi-monthly. Determine the nominal rate and thecorresponding effective rate.
Bianca invested $2,100 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 4.70% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.40% compounded semi-annually. a. Calculate the accumulated value of his investment at the end of the first 8 years. $63,385.77 $63,822.64 $40,223.97 $41,169.23 b. Calculate the accumulated value of her investment at the end of 11 years. $63,385.77 $63,822.64 $55,258.15 $41,169.23 c. Calculate the amount of interest earned from the investment. $17,622.64 $17,185.77 $16,133.72 $1,488.92
Bruno deposited $7,500 into an investment account and seven years later, the balance in the account was $10,910. What is the rate of return on this investment if interest is compounded annually? 5.5% 6.0% 6.5% 45.5%
Kelsey deposited $1,100 at the end of every month into an RRSP for 6 years. The interest rate earned was 4.50% compounded semi- annually for the first 5 years and changed to 4.75% compounded monthly for the next 1 years. What was the accumulated value of the RRSP at the end of 6 years? Round to the nearest cent

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS