What's More Activity 2.1 Read each statement and answer the question that follows. 1. If P = P85,500, and r = 1.25% compounded monthly for 1 year, find the compound interest. What is the first component that should be computed? What formula will be used? How much is the maturity value?. How will you find the simple interest?. How much is the simple interest? 2. If F = P50,000 with the rate 1.5% compounded quarterly for 5 years find the present value and compound interest Which should be find first present value or compound interest? How are you going to express the rate in decimal?. What formula will you use in finding the present value? How much is the present value? How will you find the compound interest? How much is the compound interest?

What's More Activity 2.1 Read each statement and answer the question that follows. 1. If P = P85,500, and r = 1.25% compounded monthly for 1 year, find the compound interest. What is the first component that should be computed? What formula will be used? How much is the maturity value?. How will you find the simple interest?. How much is the simple interest? 2. If F = P50,000 with the rate 1.5% compounded quarterly for 5 years find the present value and compound interest Which should be find first present value or compound interest? How are you going to express the rate in decimal?. What formula will you use in finding the present value? How much is the present value? How will you find the compound interest? How much is the compound interest?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3.2 Compare the interest earned by $1,000 for five years at 8% simple interest with that earned by the same amount for five years at 8% compounded annually. 3.3 You are considering investing $3,000 at an interest rate of 8% compounded annu- ally for five years or investing the $3,000 at 9% per year simple interest for five years. Which option is better?
“Compounding of interest is one of humanity's finest inventions,” Albert Einstein famously said. To demonstrate the mind-boggling effects of compounding, how much should you invest weekly for 30 years in a fund that earns 8% compounded quarterly in order to accumulate P5,000,000 by the time you retire?
If you want to withdraw $10,000 at the the end of two years and $35,000 at the end of four years, how much should you deposit into an account that pays 9% interest compounded annually?
Tyrone wants to spend $15,000 on a new car three years from now. He opens a savings account and deposits $3,000 today. One year from now, he plans to deposit $3,000 in the account, and one year after that, he plans to deposit another $3,000. If the account earns 5% interest per year, how much additional money will Tyrone need three years from now to meet his $15,000 goal? [Enter your answer with no dollar sign or comma.].
Question 3 Suppose you wanted to become a millionaire at retirement. If an annual compound interest rate of 11% could be sustained over a 30-year period, how much would have to be deposited yearly inorder to accumulate $1 million? What if the interest rate is 8%?
How much is accumulated over two years in each of the following savings plans? a. $60 at the end of each month for 24 months at 24 percent compounded monthly b. $50 at the end of the first month, $51 at the end of the second month, and so forth, increasing by $1 per month, at 24 percent compounded monthly Click the icon to view the table of compound interest factors for discrete compounding periods when i = 2%. a. There would be $ (Round to the nearest b. There would be $ (Round to the nearest accumulated in the account after two years. cent as needed.) accumulated in the account after two years. cent as needed.)
An account has a nominator rate of 6.5%. Find me effective annual yield,round to the nearest hundred percent, with quarterly compounding, monthly compounding, and a daily company. How does changing the compound period affect the effective annual yield?
Bank North advertises, "We pay 3.50%, compounded daily." Bank South says, "We pay 3.50%, compounded continuously." If you deposit $10,000 with Bank South for one year, how much additional interest will you receive?
Compare the interest earned by $9,000 for six years at 7% simple interest with interest earned by the same amount for six years at 7% compounded annually. Why does a difference occur? The simple interest earned is $ ?