In this question, give all answers correct to two decimal places Sam invests $1700 in a saving account that pays a nominal annual rate of interest of 2.74 compounded half-yearly. Sam makes no further payments to, or withdrawals from, this account. (a) Find the amount that Sam will have in his account after 10 years. P= $1700 FV=PVX (1+r) kn 100k r = 2.74% n = 10 years V=2 Fv = 1700x (1 + (0.0274/2/20 Fv = 1700 (1.0137) 20 Fv-22-31.71 David also invests $1700 in a savings account that plays an annual rate of interest of r%, compounded yearly. David makes no further payments or withdrawals from this account. (b) Find the value of 'r' required so that the amount in David's account after 10 years will be equal to the amount in Sam's account. P = $700 r = 2.74% n = 10 years K= (c) Find the interest David will earn over the 10 years. Simel

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
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Use Sam's data to figure out David's data 

In this question, give all answers correct to two decimal places
Sam invests $1700 in a saving account that pays a nominal annual rate of interest of 2.74
compounded half-yearly. Sam makes no further payments to, or withdrawals from, this account.
(a) Find the amount that Sam will have in his account after 10 years.
kn
FV=PVX (1+₁) ²
look
P = $1700
r = 2.74%
n = 10 years
V=2
Fv = 1700 x (1 + (0.0274/2720
Fv = 1700 (1.0137) 20
Fv=2231.71
David also invests $1700 in a savings account that plays an annual rate of interest of r%,
compounded yearly. David makes no further payments or withdrawals from this account.
(b) Find the value of 'r' required so that the amount in David's account after 10 years will be
in end to mue er jent abrit slamod (5)
equal to the amount in Sam's account.
Shimel
P = $1700
r = 2.74%
n = 10 years
K=
(c) Find the interest David will earn over the 10 years.
CH
jert nevi (d)
IS
-41
Transcribed Image Text:In this question, give all answers correct to two decimal places Sam invests $1700 in a saving account that pays a nominal annual rate of interest of 2.74 compounded half-yearly. Sam makes no further payments to, or withdrawals from, this account. (a) Find the amount that Sam will have in his account after 10 years. kn FV=PVX (1+₁) ² look P = $1700 r = 2.74% n = 10 years V=2 Fv = 1700 x (1 + (0.0274/2720 Fv = 1700 (1.0137) 20 Fv=2231.71 David also invests $1700 in a savings account that plays an annual rate of interest of r%, compounded yearly. David makes no further payments or withdrawals from this account. (b) Find the value of 'r' required so that the amount in David's account after 10 years will be in end to mue er jent abrit slamod (5) equal to the amount in Sam's account. Shimel P = $1700 r = 2.74% n = 10 years K= (c) Find the interest David will earn over the 10 years. CH jert nevi (d) IS -41
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