Kiara invested $2,000 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 4.30% compounded semi-annually and for the next 3 years it earned interest at a rate of 5.20% compounded semi-annually. a. Calculate the accumulated value of her investment at the end of the first 8 years.

Kiara invested $2,000 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 4.30% compounded semi-annually and for the next 3 years it earned interest at a rate of 5.20% compounded semi-annually. a. Calculate the accumulated value of her investment at the end of the first 8 years.

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: Samantha made regular, equal deposits into savings accounts at the end of every month for three…

A: Annuity is a no. of finite payments which are equal size and made in equal time periods. Person…

Q: Calculate the amount in the fund at the end of 3 years.

A: Time value of money means that the amount of money received in the present period will have more…

Q: At the beginning of each month, Francisco deposits $7,500 into an investment account. If the…

A: Part 2: Explanation:Step 1: Calculate the number of months in 3 years.3 years = 3 * 12 months = 36…

Q: ayla invests $3000 for 8 months in an account that earns /./% hat amount will Shayla receive when…

A: The question is related to equation that models number of new trees and in the second question total…

Q: Sophia invests $100 at the end of each year for 9 years at an annual effective interest rate of 4%.…

A: SOLUTION:- Sophia Year Investment New Value Interest @ 4% Accumulated…

Q: Carlos invested $1,800 at the beginning of every 6 months in an RRSP for 11 years. For the first 6…

A: We need to use future value of annuity due formula to calculate value of fund at specified…

Q: Shayla deposited $4,000 into an account earning 5% interest per year, compounded every 6 months.…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: Jesse invested her savings in a bank at 5.00% compounded quarterly. How much money did she invest to…

A: > Given data:> Annual interest rate = 5%> Effective annual interest rate =…

Q: Ashton invested $8450 for five years in his savings account that was earning 3.2% compounded…

A: To calculate the future value we will use the below formula Future value = P*(1+r)n Where Invested…

Q: Bianca invested $2,100 at the beginning of every 6 months in an RRSP for 11 years. For the first 8…

A: Future value of money is the amount that was being deposited and amount of compounded interest…

Q: Caroline invest $100 on the last day of each month into an account earning 8% interest, compounded…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Zach depsoits a $38,000 one-time lump sum in an account with an APR of 7% that is compounded…

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

Q: George invested $1,200 at the end of every month into an RRSP for 8 years. The interest rate earned…

A: Here,Monthly Deposits is $1,200Total Years of Investment is 8 yearsInterest Rate for first five…

Q: a. Calculate the accumulated value of her investment after the first 8 years. Round to the nearest…

A: Information Provided: Semi-annual deposits = $1600 First 8 years interest rate = 4.30% Next 8 years…

Q: Jaime Bickers invests $4000 at the end of each semiannual period for 8 years. His financial advisor…

A: Calculate the future value as follows:

Q: Morgan opened an RRSP account and deposited $2,800.00 into it. She then deposited $900.00 at the end…

A: Deposit at year-0 = $ 2800 Deposit at year-1 = $ 900 Deposit at year-2 = $ 575 Interest rate = 2.20%…

Q: 1. Meagan invested $1,200 each year in an IRA for 12 years in an account that earned 5% compounded…

A: IRA means individual retirement account. This problem can be solved in light of future value of…

Q: Natalia makes deposits in an account earning 6% annual effective at the beginning of each quarter…

A: The objective of the question is to calculate the value of P, which is the increase in the quarterly…

Q: Sean contributed equal deposits at the end of every month for 2 years into an investment fund. He…

A: This can be solved in excel. Put the cell for the monthly deposits as a blank. Now for determining…

Q: David invested $2,100 at the beginning of every 6 months in an RRSP for 11 years. For the first 5…

A: Future value An asset's future value (FV) is determined by estimating factors like future interest…

Q: Kia deposited $1,300, at the BEGINNING of each year for 26 years in a credit union account. If the…

A: Annuity = a = $1300 Time = t = 26 years Interest rate = r = 8%

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

Kiara invested $2,000 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 4.30% compounded semi-annually and
for the next 3 years it earned interest at a rate of 5.20% compounded semi-annually.
a. Calculate the accumulated value of her investment at the end of the first 8 years.
$57,748.94
$58,081.94
$37,715.84
O $38,526.73

b. Calculate the accumulated value of her investment at the end of 11 years.
$57,748.94
O $58,081.94
O $51,667.30
$38,526.73
c. Calculate the amount of interest earned from the investment.
$14,081.94
O $13,748.94
$12,941.37
O $1,140.57

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: Formula

VIEW

Step 2: Calculation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 images

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

Now it's time for you to practice what you've learned.. Suppose Teresa receives a $37,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount 1 $37,000.00 2 3 Payment Interest Repayment of Principal Ending Balance $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Payment Component Year 1 Interest Repayment of Principal Percentage of Payment Year 2 Year 3
Stacy makes a $4,600 investment at the end of every year. Interest is 8% per year and is compounded quarterly. She makes a total of ten investments. Find the value of the investment immediately after the 10th investment. $71,395 $66,638 $76,661 $67,413 $48,928
Alexandra had a balance of $2,000 in her RRSP. In addition to this, she invested $300 at the end of every 3 months for 6 years. Her RRSP earned 4.00% compounded quarterly for the first 4 years and 7.00% compounded quarterly for the rest of the period. a. What is the accumulated value of the balance of $2,000 at the end of the time period? Round to the nearest cent b. What is the accumulated value of the annuity at the end of the first 4 years? Round to the nearest cent c. What is the future value of the accumulated value from (b) at the end of the 6 years? Round to the nearest cent d. What is the accumulated value of the $300.00 annuity for the next 2 years at 7.00% compounded quarterly? Round to the nearest cent e. How much did she have in the RRSP at the end of the time period? Round to the nearest cent f. What were her total earnings? Round to the nearest cent
Sophia deposits 130,000 at the end of each yr in a savings account that pays a nominal annual rate og 9%compounded continuously. Find the difference between accumulated sum and her total actual deposits at the end of 6 yrs.
Sara deposits $13,900 into an account. For the first two years, money in the account earns 5.5% annual interest. After that. the interest rate jumps to 5.8% annual interest. How much would be in the account at the end of 4 years
adam made an investment of $33,000. The investment pays 7.75% p.a. compounded quarterly. He will be receiving equal monthly payments at the beginning of the month, into perpetuity. The first payment the investment makes to Adam will begin in exactly three years from today. What is the monthly payment Adam will be receiving?
For 13 years, Janet saved $250 at the beginning of every month in a fund that earned 4.5% compounded annually. a. What was the balance in the fund at the end of the period? b. What was the amount of interest earned over the period?
Monica invests $1600 into an account the beginning of each quarter for 9 years, starting from today. Interest is to be paid at an interest rate of 1.4% per month, compounded quarterly. Peter, would like to invest two lump sums at the beginning of the 2nd year and 4th year, with the lump sum payment 2 times greater at the 4th year than the 2nd year. Peter's account receives the same interest rate as Monica. Determine the effective interest rate per quarter under this investment. Round your answer to the nearest 0.01% Determine the future value of Monica's investment at the end of the 9 years. Round your answer to the nearest $100 Determine what lump sum Peter must invest at the beginning of the 2nd year that would yield the same yield value as Monica by the end of the 7 years. Round your answer to the nearest $100.
Rose has an opportunity to invest in an income account at 12% compounded continuously. The amounts invested plus interest come back to Rose in the form of a cheque at the end of each month for 8 years. How much should Rose invest if she wants the monthly income cheque to be $1000 ?
Jill makes monthly payments of $125 into a savings plan which pays 7.5% annual interest. At the end of 30 years find the following: The amount the account is worth and The total deposits Jill made.
Mrs. Parker bought a computer set for $32,000 to be paid in equal payments at the end of every 3 months for 1 year. If the interest is 8% compounded quarterly, construct the amortization schedule.
Juanita has $100 deducted from her paycheck at the end of each month and put into a savings account earning 11% interest compounded monthly. She continues these deposits for 5 years. How much is in the account at the end of 5 years?

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