Picture ToolsFormatO Tell me what you want to do...Exercise 8. Continuous Compounding. Use the formula for continuouscompounding to compute the balance in the following accounts after 20 years:A $10,000 deposit in an account with an APR of 3.5%4A = P xe(APR*Y)Exercise 9. Savings Plan Formula. Assume monthly deposits and monthlycompounding in the following saving plans: Find the savings plan balance after12 months with an APR of 3% and monthly payments of $150.(nY)1+ APR- 1A = PMT xAPR

A concept through which it is studied that the current worth of money is higher than its future…

Exercise 8. Continuous Compounding. Use the formula for continuous compounding to compute the balance in the following accounts after 20 years: A $10,000 deposit in an account with an APR of 3.5% A = P xe(APR Y) Exercise 9. Savings Plan Formula. Assume monthly deposits and monthly compounding in the following saving plans: Find the savings plan balance after 12 months with an APR of 3% and monthly payments of $150. (nY) 1+4PR A = PMT x APR

Exercise 8. Continuous Compounding. Use the formula for continuous compounding to compute the balance in the following accounts after 20 years: A $10,000 deposit in an account with an APR of 3.5% A = P xe(APR Y) Exercise 9. Savings Plan Formula. Assume monthly deposits and monthly compounding in the following saving plans: Find the savings plan balance after 12 months with an APR of 3% and monthly payments of $150. (nY) 1+4PR A = PMT x APR

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

Similar questions

Savings Plan Suppose you deposit $450 monthly into an account for seventeen years. The account has an APR of 4.2% compounded monthly. a. Find the ending balance (after 17 years). Answer: $ _____________ b. How much of the ending balance is money you deposited? (HINT: Find the total deposits.) Answer: $ _____________ c. How much of the ending balance is interest? (Use your rounded answer to part a.) Answer: $ _____________
Use the formula for continuous compounding to compute the balance in the account after 1,5, and 20 years. Also, find the APY for the account. A $14,000 deposit in an account with an APR of 2.5 % .
Suppose the interest rate is 10.2 % APR with monthly compounding. What is the present value of an annuity that pays $ 119 every 6 months for 6 years? Question content area bottom Part 1 The 6 -month effective interest rate is 5.209 %. (Round to three decimal places.) Part 2 The present value is $enter your response here . (Round to the nearest cent.)
Tutorial Exercise Suppose that your bank pays 6% interest, compounded quarterly. Use Table 12-2 to find how much should be deposited now to yield an annuity payment of $1,600 at the end of each three months, for 3 years. Step 1 The present value of an annuity is the amount needed now so that desired annuity payments may be made in the future. Since payments will be made at the end of each three months, this is an ordinary annuity. To find the present value of this annuity, the amount of money that should be deposited in an account now, the interest rate per period must first be found. The interest rate per period is calculated using the nominal, or annual, rate and the number of periods per year as follows. nominal rate interest rate per period = periods per year The rate was given to be 6%. Interest is compounded quarterly, or 4 times per year. Find the interest rate per period. nominal rate interest rate per period periods per year 4 |% The total number of compounding periods will be…
Which investment will give you the higher future value in 5 years? Investment 1: You deposit $100 every month into an investment savings account that has an interest rate of 2.5% compounded daily. Investment 2: You deposit $300 every three months into an investment savings account that has an interest rate of 2.6% compounded semi-annually.
2. What is the effective annual interest rate in each situation? Show and explain all supporting calculations. a. A savings account with 4% annual interest rate compounded daily (assume a year consists of 365 days)? b. A savings account with 4% annual interest rate compounded monthly?
You expect to have the given amount in an account with the given terms. Find how much you can withdraw periodically in order to make the account last the specified amount of time. Round your answer to the nearest cent. Account balance: $600,000 Interest rate: 4.85% Frequency:monthly Time: 17 years
Find the savings plan balance after 4 years with an APR of 4% and monthly payments of $150
a. Use the appropriate formula to find the value of the annuity. b. Find the interest. Periodic Deposit Rate $2000 at the end of every three months 6.25% compounded quarterly Click the icon to view home finance formulas. Time 6 years
a. Use the appropriate formula to find the value of the annuity b.how much of the financial goal comes from deposit and how much comes from interest? periodic deposit-$? at the end of the month Rate-5% compounded monthly Time-16 years Financial goal-$140,000
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate $? at the end of each month 3.5% compounded monthly i Click the icon to view some finance formulas. Time 14 years Financial Goal $180,000 a. The periodic deposit is $ (Do not round until the final answer. Then round up to the nearest dollar as needed.) b. $ of the $180,000 comes from deposits and $ comes from interest. (Use the answer from part (a) to find these answers. Round to the nearest dollar as needed.)
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit $? at the end of each year iClick the icon to view some finance formulas. Rate 3% compounded annually Time 16 years Financial Goal $120,000

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