On January 1, 2011 you invested $1,000 into a mutual fund that has been set up as a Roth IRA. You do not make any other deposits into this Roth IRA. On January 1, 2015 your account balance is $2,280. First, what has been your average annual rate of returns over the four-year period? Second, how much of the current account value of $2,280 could you withdraw without penalty on January 1, 2015 to put toward the down payment of your first home?

On January 1, 2011 you invested $1,000 into a mutual fund that has been set up as a Roth IRA. You do not make any other deposits into this Roth IRA. On January 1, 2015 your account balance is $2,280. First, what has been your average annual rate of returns over the four-year period? Second, how much of the current account value of $2,280 could you withdraw without penalty on January 1, 2015 to put toward the down payment of your first home?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A person spent 7000 TL with a credit card and could not pay his debt. Credit card applies 36% interest annually as default interest and the interest period is used daily in calculations. a) What is the annual effective interest? b) In how many months will he pay his debt if he pays 200 TL every month? c) If he pays his debt in one go after 1 year, how many liras should he pay? d) If he pays his debt in equal installments every month within 1 year, how much should he pay each month? e) What is the real interest rate if the annual inflation is 28%? f) What is the interest he will pay if he makes an agreement to pay his debt in 10000 TL one year later?
3. Answer both A and B questions A. What are the differences between the simple interest and compound interest? (Elaborate, minimum of three sentences). B. An investor deposited OMR 9,000 into an account paying 8% annual interest compounded quarterly. (Use the compounded interest formula). Calculate the following. 1. How much money will be in the account after 5 years? 2. How much money will be in the account after 9 years? 3. How much money will be in the account after 3 years? Answer:
Esther deposited $25,000 in a savings bank on January 13,2013. At that time the bank was paying 4% interest compounded quarterly. On July 13, 2015, the bank announced that it would start paying 4.5% interest, compounded quarterly. How much did Esther have to her credit on July 13, 2017? Answer: P
1b. Originally, the depositor intended to withdraw $100 at the end of 2023, emptying an account that earns 5% interest, compounded annually. Now, suppose the depositor changes their mind (i.e., does not empty the account in 2023) and instead delays withdrawing their money until 2025. What withdrawal amount would empty the account?
You have just deposited X dollars in your bank account that pays interest of 6 percent p.a. You discover that at the end of one year you have $ 10,044 in the account. What was X, that is, the amount of money that you deposited today? (Record your answer without a dollar sign, without commas and round your answer to 2 decimal places; that is, record $3,245.847 as 3245.85).
Dante deposited $2000 into an account with a 6% annual interest rate, compounded semiannually. Assuming that no withdrawals are made, how long will it take for the investment to grow to $3000 ? Do not round any intermediate computations, and round your answer to the nearest hundredth. ________ years
You opened an account with an investment of $1,000 10 years ago. The ending balance in the account is $1,500. Given annual compounding, what interest rate was earned on the account?
FOLLOW THE FORMULAS GIVEN ABOVEDOWNVOTE IF YOU DONT FOLLOW THE FORMULAS
It is the first day of the year and you plan to make a total of 5 deposits of $ 4, 000 each, one every 6 months with the first payment being made today. The bank pays a nominal interest rate of 15% but uses semiannual compounding. How much your account with the bank be if you leave the money in the bank to be withdrawn all in 12 years from today? Round to the nearest $0.01 but do not use the $ sign. DO NOT USE commas to separate thousands. For example if you obtain $1, 432.728 then enter 1433.73; if you obtain $432 then enter 432.00
An investor places $X into an account earning monthly compounded interest, and makes no further deposits or withdrawals. As we move from one month to the next, the dollar amount of interest earned per compounding period will remain constant. A) True B) False
Assume Bill Jones invested $4,604.93 into an account exactly one year ago. The account has an interest rate of 7.4% p.a. How much does Bill have in his account today (that is, exactly one year after the initial deposit)?
If Mike deposited and withdrew as shown below, how much can he withdraw at the end of 5th year? Assume i=4%. If it is a deposit, then enter the value as a negative number and if it is a withdrawal, then enter the value as a positive number. n 0 1 2 3 4 5 CF 0 -500 -400 500 -500 -500 If the answer is a dollar value then enter the number without any comma, without $sign, without any gap, and with 2 decimal digits, for example, -5896547.12 4 If the answer is a % then enter the number with 3 decimal digits followed by a % sign without any gap, for example 3.123% or 4.210%