None k. Five banks offer nominal rates of 9% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. Assume 365 days in ayear.1. What effective annual rate does each bank pay? If you deposit $4,500 in each bank today, how much will you have in each bank at the end of 1 year? 2 years? Round youranswers to two decimal places.ABсDEEAR9%9.20%9.31%9.38%9.42%FV after 1 yearFV after 2 years$4,9055,346.454,914.115,366.33$$4,918.875,376.744,922.134,923.73$5,383.865,387.362. If the TVM is the only consideration, what nominal rate will cause all of the banks to provide the same effective annual rate as Bank A? Round your answers to two decimalplaces.Nominal rateBC8.81%8.72%E8.65%8.62%3. Suppose you don't have the $4,500 but need it at the end of 1 year. You plan to make a series of deposits annually for A, semiannually for B, quarterly for C, monthly for D,and daily for E-with payments beginning today. How large must the payments be to each bank? Round your answers to the nearest cent.ABPayment$4,128.44$CD$E

To explain how the payments for each bank in part 3 are determined, we will use the concept of…

Answered: k. Five banks offer nominal rates of 9%…

Corporate Fin Focused Approach

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Chapter4: Time Value Of Money

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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.
k. Five banks offer nominal rates of 9% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. Assume 365 days in a year. 1. What effective annual rate does each bank pay? If you deposit $6,000 in each bank today, how much will you have in each bank at the end of 1 year? 2 years? Round your answers to two decimal places. A E EAR % % % %24 24 FV after 1 year $ $4 2$ $4 FV after 2 years %24 2$ $ 2. If the TVM is the only consideration, what nominal rate will cause all of the banks to provide the same effective annual rate as Bank A? Round your answers to two decimal places. A-Z office Nominal rate % % % % 3. Suppose you don't have the $6,000 but need it at the end of 1 year. You plan to make a series of deposits – annually for A, semiannually for B, quarterly for C, monthly for D, and daily for E– with payments beginning today. How large must the payments be to each bank? Round your answers to the nearest cent. A D Payment $4…
k. Five banks offer nominal rates of 10% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. Assume 365 days in a year. What effective annual rate does each bank pay? If you deposit $3,500 in each bank today, how much will you have in each bank at the end of 1 year? 2 years? Round your answers to two decimal places. A B C D E EAR % % % % % FV after 1 year $ $ $ $ $ FV after 2 years $ $ $ $ $ If the TVM is the only consideration, what nominal rate will cause all of the banks to provide the same effective annual rate as Bank A? Round your answers to two decimal places. B C D E Nominal rate % % % % Suppose you don't have the $3,500 but need it at the end of 1 year. You plan to make a series of deposits — annually for A, semiannually for B, quarterly for C, monthly for D, and daily for E — with payments beginning today. How…
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A bank account pays 5.5% annual interest, compounded monthly. How long will it take the money to double in this account? If the present value is Rs.1, its future value is Rs.2. The bank is compounding monthly; thus, the interest rate is 5.5/12 percent per month.
2. If the TVM is the only consideration, what nominal rate will cause all of the banks to provide the same effective annual rate as Bank A? Round your answers to two decimal places. Nominal rate Payment B 5.91 $ A % 2,830.19 C 5.88 B % 3. Suppose you don't have the $3,000 but need it at the end of 1 year. You plan to make a series of deposits annually for A, semiannually for B, quarterly for C, monthly for D, and daily for E- with payments beginning today. How large must the payments be to each bank? Round your answers to the nearest cent. $ D с 5.84 % $ D E 5.83 $ % E
7. If you want to collect ¢ 5,000,000 in 4 years and for this you make deposits every end of the month in the local bank that pays 18% interest compounded monthly. After 3 years, the bank lowers the interest to 15%. What is the value of each deposit, before and after the change in the interest rate?
4) Find the account balance at the end of 10 years, if you deposit 15,000 in an account today if a. The bank pays interest at 12% per year. b. The bank pays interest at 6% every 6 months. c. The bank pays interest at 3% per quarter, d. The bank pays interest at 1% per month. What do you observe when you compare the balances for the four scenarios listed.
Suppose you deposited $41,000 in a bank account that pays 5.75% with daily compounding based on a 360-day year. How much would be in the account after 8 months, assuming each month has 30 days? a. $42,598.28 b. $42,571.67 c. $43,426.30 d. $42,793.66 e. $42,602.05
An online bank is offering to pay 0.25% interest per month on deposits. Your local bank offers to pay 0.75% interest quarterly (every 3 months). Which is the higher interest rate? The EAR for the online bank is %. (Round to four decimal places.)
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