I need some help I invest $10,000 for 7 years interest is calculated at 3.6% per annum compounded quarterly. a) what will be the balance at the end of the 7 years? b) Find the amount of the total interest received over the 7 years. c) By how much would the interest received change if the compound period would change to monthly instead of quarterly?

I need some help I invest $10,000 for 7 years interest is calculated at 3.6% per annum compounded quarterly. a) what will be the balance at the end of the 7 years? b) Find the amount of the total interest received over the 7 years. c) By how much would the interest received change if the compound period would change to monthly instead of quarterly?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 31P

See similar textbooks

Related questions

Q: At what effective annual rate of interest i will a payment of $7,000 accumulate to $8,179.57 in 4…

A: An effective annual rate is defined as the rate of an interest, which is actually earned on…

Q: What is the future value of $1,000 in five years at 8% interest paid semi annually ? Paid quarterly?…

A: Future value is an amount reccievable in future(after certain period) by investing today. Formula…

Q: How much money must you deposit now at 6% interest compounded quarterly in order to be able to…

A: The given problem can be solved using PV function in excel. PV function computes current balance…

Q: You are planning to buy an used car from a local dealer. The list price of the car is $12,000. If…

A: List Price of Car = $12,000Down Payment = $5,500Cash cost of car = $11,000Bank Interest rate =…

Q: What amount needs to be deposited into an account earning 4.3% interest compounded annually to have…

A: Present value is an estimate of the present value of future cash values that may be received at a…

Q: Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t…

A: Principal amount (P) = $43,000 Interest rate (r) = 9 3/4% = 9.75% Period (t) = 9 Years Compounding…

Q: How much is the amount of interest on a loan of $12330.7 that is borrowed today and is to be repaid…

A: Future value refers to the value of a current asset on some future date affected by the interest…

Q: A person deposits $1,000 for 5 years in an account that pays 7.2% per year compounded quarterly.…

A: Future value refers to the future date value when all cash flows are compounded at the given…

Q: If $7,128 is deposited into an account that earns simple interest and it takes 9 years to earn…

A: Interest earned is 1796.26 No of years =9 Annual interest is = 1796.26/9 = 199.58

Q: Problem 1. Answer the following questions on recurrence relations. a) A person deposits $5000 in an…

A: A recurrence relation is an equation that defines a sequence based on a rule that gives the next…

Q: a. Set up an amortization schedule for a $19,000 loan to be repaid in equal installments atthe end…

A: The above question deals with the amortization of loan by way of annuity payments and observing the…

Q: 2) If you deposit $3 account balance How many yea

A: The question is based on the concept of Financial Management.

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: The future value of the account can be computed by using the future value of a single deposit…

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: Here, Principal Amount (PV) is $13,000 Annual Interest Rate (r) is 3% Compounding Period (m) is…

Q: Mark Welsch deposits $7,300 in an account that earns Interest at an annual rate of 8%, compounded…

A: Compound = Quarterly = 4Present Value = pv = $7300Interest rate = r = 8 / 4 = 2%Time = t = 1 * 4 = 4

Q: You deposit $4000 in an account that pays 6% interest compounded semiannually. After 3 years, the…

A: Compound interest is interest computed on both the initial principal amount and any accrued interest…

Q: What is the present value of receiving $2,500 at the end of each year for 5 years, assuming 7%…

A: As it is the case of annuity due, thus, the first table will be used @7%, 5 years.

Q: How much must be deposited today into an account earning 3% interest annually to support an annual…

A: Information Provided: Interest rate = 3% Annual withdrawal = $1800

Q: What is the balance in the account after 3years? How much of this balance corresponds to "interest…

A: Information Provided: Principal = $1250 Interest rate = 8% A: Period = 3 years B: Period = 31 years…

Q: If you make quarterly deposits of $363.00 into an ordinary annuity earning an annual interest rate…

A: Quarterly deposits are $363.00 The annual interest rate is 3.79% The time period is 6 years To Find:…

Q: Assume that you invest $1000 for 15 years in an account that pays an interest rate of 7% per year…

A: Account value at the end of 15 years (if interest is calculated only on principal amount) is…

Q: A person deposits $2750 in an account that yields 3.5% interest compounded annually. Set up a…

A: Deposit amount (D) = $2750 Annual yield (r) = 3.5%

Q: Suppose that $4500 is invested in an account that pays 2% annually and is left for 4 years. 1) How…

A: Given Information: Principal = $4,500 Rate = 2% or 0.02 Time = 4 years

Q: Suppose that $500 is deposited at the end of every quarter for 6 years in an account that pays 8%…

A: To calculate the value of the annuity, we can either use excel or fv calculator where R= RATE OF…

Q: How much money would be in an account if $6,200 is deposited at 2% interest compounded semi-annually…

A: Time value tells the amount received by an individual today is of more worth than the same amount…

Q: If you deposit $2000 in an account that pays 3.6% with quarterly compounding, what is the balance…

A: given, pv = $2000 r = 3.6% m =4 n= 6

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: The future value of the cash flow is the future worth of a cash flow at a certain rate of interest…

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: The future value of the account can be computed by using the future value of a single deposit…

Q: Consider a $1,000 deposit earning 7 percent interest per year for six years. What is the future…

A: Future value is that amount which will be require to paid at some specified period of time. It…

Concept explainers

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.

Question

I need some help

I invest $10,000 for 7 years interest is calculated at 3.6% per annum compounded quarterly.

a) what will be the balance at the end of the 7 years?

b) Find the amount of the total interest received over the 7 years.

c) By how much would the interest received change if the compound period would change to monthly instead of quarterly?

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: Introduction:

VIEW

Step 2: Calculations:

VIEW

Solution

VIEW

Step by step

Solved in 3 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

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.
1. If you invest $ 2,000 now and it will become $ 6,000 at the end of 4 years, determine the nominal rate of interest and the corresponding effective rate of interest if the interest is compounded quarterly.
A person deposits $1,000 for 5 years in an account that pays 7.2% per year compounded quarterly. What is the interest rate per period? % How many compounding periods are there? How much is in the account at the end of the 5 years? $ Round to two decimal places as necessary.
a. Set up an amortization schedule for a $19,000 loan to be repaid in equal installments atthe end of each of the next 3 years. The interest rate is 8% compounded annually.b. What percentage of the payment represents interest and what percentage representsprincipal for each of the 3 years? Why do these percentages change over time?
Problem 1. Answer the following questions on recurrence relations. a) A person deposits $5000 in an account that yields 7% interest compounded annually. i) Set up a recurrence relation for the amount in the account at the end of n years. ao = ? an = ? ii) How much money will the account contain after 7 years? Show you calculation.
A person deposits $2750 in an account that yields 3.5% interest compounded annually. Set up a recurrence relation for the amount in the account at the end of n years.b) Find an explicit formula for the amount in the account at the end of n years.c) How much money will be in the account after 25 years?
If you deposit $2000 in an account that pays 3.6% with quarterly compounding, what is the balance after six years? How much interest is earned?
Suppose that $500 is deposited at the end of every quarter for 6 years in an account that pays 8% compounded quarterly. What is the interest rate per period? Find the future value of the annuity.
What is the future value of $1,000 in five years at 8% interest paid semi annually ? Paid quarterly? How much would you have to deposit today to have $1,000 in 8 years at 6% paid annually? Quarterly? How do you use the tables to calculate this vs calculate .
How much interest will be earned if $5,000.00 is invested for 3 years at 10% compounded semi-annual? HINT: You know how to find the future value of the investment at the end of the time period. To find the amount of interest earned, just subtract the PRINCIPAL from the future value.You would earn $ in interest. (Round to 2 decimal places.)
What amount needs to be deposited into an account earning 4.3% interest compounded annually to have $21,707 in 11 years?
You borrow a GPM of $120,000 with annual payments and 30-year term. The interest rate is 10%. The payment rises by 2% each year. please show how to solve using excel to answer a. b. and c. below a. What are the annual payments for years 1 to 30? b. What is remaining balance at the end of each year? c. What are the interest payment and principal payment for years 1 to 30?