Sophia invests $8,059 in a savings account that offers an annual percentage rate (APR) of 6.5%.Unlike typical savings accounts, this account compounds interest continuously. What is the effectivannual rate (EAR)?O 6.50%6.72%O 6.61%106.72%6.66%

Compounding is an important aspect of the concept of time value of money. When you invest a sum of…

Answered: Sophia invests $8,059 in a savings…

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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You plan to withdraw the amounts given below over the next five years from a savings account that earns 9% interest compounded annually, how much do you need to deposit now? End of Year 1 $0.00 Year 2 $24,000.00, Year 3 $14,000.00 Year 4 $26,000.00 Year 5 $42,000.00
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find f16
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= A bank features a savings account that has an annual percentage rate of r interest compounded quarterly. Tatiana deposits $9,000 into the account. The account balance can be modeled by the exponential formula A(t) = a (1 + 7-)kt, where A is account value after t years, a is the principal (starting amount), r is the annual percentage rate, k is the number of times each year that the interest is compounded. (A) What values should be used for a, r, and k? a = r = 5.6% with k = (B) How much money will Tatiana have in the account in 7 years? Answer = $ 7. Round answer to the nearest penny. APY = = %. Round answer to 3 decimal places. (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year).
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You invest $6,600 into a savings account at Mountain America Credit Union which pays 1.8% annual interest compounded quarterly. How much interest will you earn after 3 years? $89.50 $365.35 $6,689.50 $6,965.35
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Sophia invests $8,059 in a savings account that offers an annual percentage rate (APR) of 6.5%. Unlike typical savings accounts, this account compounds interest continuously. What is the effecti annual rate (EAR)? O 6.50% O 6.72% O 6.61% O 106.72% O 6.66%