Solve the following word problem by using Table 11-1. The First National Bank is offering a 5-year certificate of deposit (CD) at 4% interest compounded quarterly; Second National Bank is offering a 5-year CD at 3% interest compounded annually. Round percentage answers to two decimal places. Round dollars to the nearest cent. Do not round intermediate calculations. Click here for Table 11-1 a. If you were interested in investing $7,000 in one of these CDs, calculate the compound amount of each offer. First National: $ Second National: $ b. What is the annual percentage yield of each CD? Do not enter the percent symbol in your answer. First National: % Second National: % c. If Third National Bank has a 5-year CD at 3.5% interest compounded monthly, use the compound interest formula to calculate the compound amount of this offer. $

Solve the following word problem by using Table 11-1. The First National Bank is offering a 5-year certificate of deposit (CD) at 4% interest compounded quarterly; Second National Bank is offering a 5-year CD at 3% interest compounded annually. Round percentage answers to two decimal places. Round dollars to the nearest cent. Do not round intermediate calculations. Click here for Table 11-1 a. If you were interested in investing $7,000 in one of these CDs, calculate the compound amount of each offer. First National: $ Second National: $ b. What is the annual percentage yield of each CD? Do not enter the percent symbol in your answer. First National: % Second National: % c. If Third National Bank has a 5-year CD at 3.5% interest compounded monthly, use the compound interest formula to calculate the compound amount of this offer. $

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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Determine the amount of money in a savings account at the end of 4 years, given an initial deposit of $13,000 and a 4 percent annual interest rate when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) a. Annually b. Semiannually c. Quarterly Future Value
Cline Corporation deposits $75,000 every quarter in a savings account (beginning at the end of the current quarter) for the next six years so that it can purchase a new piece of machinery at the end of six years. The interest rate is 4%. How much money will Cline Corporation have at the end of six years? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round any intermediary calculations, and round your final answer to the nearest dollar.) Group of answer choices $2,043,240 $2,023,010 $2,931,195 $1,126,935
You are comparing two banks. One bank is online and offers a savings account interest rate of 1.75% compounded quarterly. One bank is in your hometown and offers a savings account interest rate of 1.72% compounded daily. You have $4500 to keep in a savings account for 2 years, so you need to decide which bank would pay more interest. The online bank has an APY of what percentage? Round your percentage to three decimal places) 1.762 The hometown bank has an APY of what percentage? Round your percentage to three decimal places) 1.735 %. ✔ %. Therefore if you invest the same amount of money for the same amount of time, the bank that pays more interest is O Online bank O Hometown bank Enter a number. How much more interest would you earn at the bank you just selected compared to the other bank? State your result rounded to two decimal places. Hint: You will need to use the original investment information to calculate the interest earned on each account.
Which do you prefer: a bank account that pays 5.0% per year (EAR) for three years or a. An account that pays 2.5% every six months for three years? b. An account that pays 7.5% every 18 months for three years? c. An account that pays 0.50% per month for three years? (Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.) If you deposit $1 into a bank account that pays 5.0% per year for three years: The amount you will receive after three years is $ (Round to five decimal places.)
Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8% compounded annually. In other words, how much do you have to deposit now (with the second deposit in the amount of $1,000 at the end of the first year) so that you will be able to withdraw $600 at the end of the second year through the fourth year , and $ 800 at the end of the fifth year , where the bank pays you 8% annual interest on your balance ?
Compute the present value of a $2,000 deposit in year 1, and another $1,500 deposit at the end of year 3 if interest rates are 10 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
An investor has accumulated $4,450 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 9%. A one-year bank certificate of deposit will pay 11%, but the minimum investment is $7,450. Required: a. Calculate the amount of return the investor would earn if the $4,450 were invested for one year at 9%. b. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 19%, and then $7,450 were invested for one year at 11%. c. Calculate the net rate of return on the investment of $4,450 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places. a. Amount of return b. Net amount of return c. Net rate of return %
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate $? at the end of each month 3.5% compounded monthly Click the icon to view some finance formulas. a. The periodic deposit is $. (Do not round until the final answer. Then round up to the nearest dollar as needed.) Formulas b. S of the $220,000 comes from deposits and S comes from interest. (Use the answer from part (a) to find these answers. Round to the nearest dollar as needed.) A= In the provided formulas, P is the deposit made at the end of each compounding period, r is the annual interest rate of the annuity in decimal form, n is the number of compounding periods per year, and A is the value of the annuity after t years. P[(1+r)²-1] T Time 10 years A= nt P= Financial Goal $220,000 响 nt [(¹-3) - X SEX
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate $? at the end of each month 3.5% compounded monthly i Click the icon to view some finance formulas. Time 14 years Financial Goal $180,000 a. The periodic deposit is $ (Do not round until the final answer. Then round up to the nearest dollar as needed.) b. $ of the $180,000 comes from deposits and $ comes from interest. (Use the answer from part (a) to find these answers. Round to the nearest dollar as needed.)
Assume Bill Jones invested $ 2,160.57 into an account exactly one year ago. The account has an interest rate of 5.9 % p.a. How much does Bill have in his account today (that is, exactly one year after the initial deposit)? (Round your answer to the nearest cent and record your answer without a dollar sign and without commas. For example, record $1,356.8382 as 1356.84).
Your company is planning to borrow $1 million on a 5-year, 11%, annual payment, fully amortized term loan. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What fraction of the payment made at the end of the second year will represent repayment of principal? Do not round intermediate calculations. Round your answer to two decimal places. %
Assume you deposit $4,400 at the end of each year into an account paying 10.5 percent interest. a. How much money will you have in the account in 24 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 48 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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