Ms. Whitmell is helping her two friends, Sally and Johnny, invest money to save for the future. Sally has $1200 and it is going into a bank account that pays 3.8% per annum, compounded quarterly. Johnny has $1500 going into a bank account that pays 2.5% per annum, compounded semi-annually. When, if ever, will Johnny and Sally have the same amount of money in their bank accounts? **Make sure to check the units of your final answer**

Ms. Whitmell is helping her two friends, Sally and Johnny, invest money to save for the future. Sally has $1200 and it is going into a bank account that pays 3.8% per annum, compounded quarterly. Johnny has $1500 going into a bank account that pays 2.5% per annum, compounded semi-annually. When, if ever, will Johnny and Sally have the same amount of money in their bank accounts? Make sure to check the units of your final answer

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

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Slick Sam has a special relationship with his banker. The nature of the relationship is as follows: • The bank owes Sam $100 per year forever. The 1st payment is due in 1 year. • The bank will borrow or lend money to Sam at a constant effective rate of i per year. Today, Sam calculated the present value of the payments that are due to him as X. Sam can receive his first 16 payments at the end of year 16 in a lump sum. If he does that, then the total value of the lump sum and future payments at the end of the sixteenth year is X + 2,000. Calculate X. A B с D E 3,330 3,350 3,400 3,450 3,500
Your father made an investment plan for you. He decided to deposit Rs. 2,000 in a savings account for you on each and every one of your birthdays, beginning with your 5th. The savings account bears a 15 percent compound annual rate of interest, compounded semiannually . You have just turned 28 and want all the cash. However, it turns out that your father made no deposits on your sixth, seventh, and thirteenth birthdays. How much is in the account now – on your twenty-eighth birthday?
13) Rachel wants to take a trip to England in 3 years, and she has started a savings account today to pay for the trip. Today (8/1/02) she made an initial deposit of $1,000. Her plan is to add $2,000 to the account one year from now (8/1/03) and another $3,000 to the account two years from now (8/1/04). The account has a nominal interest rate of 7 percent, but the interest is compounded quarterly. How much will Rachel have in the account three years from today (8/1/05)?
Abby earned $600 Abby earned $600 this summer babysitting. She decided to put this money in a bank that earns a 5% simple interest rate. How many years will it take to double her initial deposit? a) 10 yearsb) 12 yearsc) 15 yearsd) 18 yearse) 20 years
Lara wishes to buy a gift for her parent's golden wedding anniversary. She decided to deposit a consistent amount of money every week into her savings account at an interest rate of 1.5% and made a decision not to withdraw any amount from the account. How much money will she have after 2 years if she decided to deposit $750 each week?
Mrs. Peacock invests $4757 in a bank account that has an interest rate of 4% for the first 4 months, and 8% thereafter. How much money will she have after 9 months?
One year ago, Sinem deposited $80,000 in her investment account for the purpose of buying a flat fuve years from today. Today she is adding another $20,000 to her account. She plans on making a final deposit of $35,000 to the account one year from today. If the interest rate is 10% how much cash will be available in her investment account when she is ready to buy the flat? (Round 2 decimal places e.g 18.64)
An electrical engineer who is anticipating paying for his daughter’s college education plans to start depositing money now (year 0) and continue through year 17. If he deposits $5000 each year, how much will his daughter be able to withdraw each year starting in year 18 and continuing through year 22? Assume the account earns interest at 8% per year.
Molly deposits $2,500 in her checking account today. Her checking account pays interest of 2.5% compounded annually. Assuming Molly does not withdraw any funds and does not deposit any additional funds, how much will be in her account in 23 years?
Mrs Sam has deposited $ 18,000 in a bank at the rate of 7% per annum. Find out how much she will receive after 12 years? Also comment on what effect will she get on her initial deposit if the rate is changing to 10% if she still willing to receive the same sum after 12 years.
From age 20 to 35, Susan deposits $350 semi-annually in a savings account paying 6.12% compounded semi-annually. She then quits making deposits, and leaves the money to continue earning interest until she reaches age 65. William starts later, at age 50, and deposits $2200 semi-annually in an account paying the same rate until he reaches 65. (a) How much money will Susan have accumulated at age 65? $ (b) How much money will William have accumulated at age 65? $

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