Mark wants to invest $10,000. In a CD for at least 10 years.The first choice is a CD that pays 4% annually and uses simple interest. What is the totalvalue after 10 years?a) $14,000Ob) $6,000c) $10,000O d) $400

Simple Interest = P * R * TTotal Value = P + (P * R * T)Where P = PrincipalR = RateT = Time

Answered: Mark wants to invest $10,000. In a CD…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Your finance advisor offers you an investment that promise $200000 in 15 years from now. He said that you will need to contribute an initialinvestment of $45,000 now. Required:a. What rate of interest was used in the computation of this investment offerassuming the rate is compounding annually?b. If you wish to retire in just 10 years from now with the same $200 000and the rate of return is 12%, how much money would you need to invest now?c. If you wish to retire with $250 000, using the same initial investment of$45 000 and the rate of return of 15%, how long will you need to wait beforeyou can retire?
Suppose an agent has $100,000 today that he wants to save for 10 years. Compare the following two savings plans. Bank A offers the following alternative: For the first $50,000 the agent obtains 8% p.a. (per annum) for 10 years. For the other amount he obtains 4% p.a. for the first four years. Then he obtains 2% p.a. Bank B offers the following alternative: The interest in year 1 is 2%, in year 2 is 4%, in year 3 is 8%, in year 4 is 30%, then for years 5 to 10 the agent obtains 2% p.a. For both plans, interest payments are reinvested. (a) The agent maximizes the amount at t=10. Which plan is better? How much more can he spend at t=10, if he chooses the better one? (b) Suppose bank B wants to match the offer of bank A. Interest rates for years 2 to 10 are as above. What interest rate for the first year must bank B offer the agent so that he gets the same amount as from bank A?
A. If i buy a car from a dealership for $27000 with 2.5% paying monthly for a total of 3 years how much will i owe? B. If i buy a car from the dealership with 2% APR for 60 months with sticker price of $30,000 how much will i owe? C. If i buy the car for 10,000 with 10% interest for 6 years how much would it cost. Which option is better?
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You are looking at two investment options, A and B. Investment A is a 15-year annuity that needs an end-of-month payment of $1,100 and has an APR of 9% compounded monthly. Investment B is also a 15-year investment, but a lump sum investment that has as an APR of 8% compounded daily. How much money do you need to invest in B today as a single lump sum amount if you wish to have the same wealth as in Investment A in 15 years? If Investment B, with 8% APR compounded daily, gave you the option of investing a constant amount at the end of every six months, what would this amount be in order to give you the same wealth as in A at the end of 15 years?
A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives. The first is a 90% loan for 25 years at 9% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 1 point. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money? O 12.01% O 14.34% 13.50% O 13.66%
suppose you are offered the following three accounts to invest $10,000 for 20 years: 18% simple interst and 5% interest compounded monthly. which is the besr choice?
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Suppose you would like to purchase a new mustang GT. The sticker price of the mustang you want is $40000. The dealer is able to give you an APR of 4% for 5 years. How much will your monthly payments be?How much will you have paid in interest once the loan is paid off?
You deposit $10000 into a CD with 5% interest compounded monthly. The CD will last 10 years. When you use the compound interest formula we discussed to find the amount you will have after 10 years, you will have: PN = 10000(a number). What is the number? Round to 3 decimal places.
An investment will generate $12,000 a year for 30 years. If you can earn 12 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it?-Select-YesNoItem 2 Calculate the present value of investment, if you could earn only 9 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it in this case?
Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.84% interest. Suppose also that you can put down 30%. What are the monthly payments? (Round your answer to the nearest cent.) $ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.) $ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.)

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Mark wants to invest $10,000. In a CD for at least 10 years. The first choice is a CD that pays 4% annually and uses simple interest. What is the total value after 10 years? O a) $14,000 Ob) $6,000 Oc) $10,000 Od) $400