Suppose you have $2,200 and plan to purchase a 10-year certificate of deposit (CD) that pays 10.9% interest, compounded annually. How much will you have when the CD matures? a. $6,358.50 b. $6,190.68 c. $5,582.22 d. $6,976.63 e. $2,439.80

Suppose you have $2,200 and plan to purchase a 10-year certificate of deposit (CD) that pays 10.9% interest, compounded annually. How much will you have when the CD matures? a. $6,358.50 b. $6,190.68 c. $5,582.22 d. $6,976.63 e. $2,439.80

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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Find the interest rates earned on each of the following. Round your answers to the nearest whole number. a. You borrow $700 and promise to pay back $777 at the end of 1 year. 11 % b. You lend $700 and the borrower promises to pay you $777 at the end of 1 year. 11 % c. You borrow $88,000 and promise to pay back $550,376 at the end of 15 years. 13 % d. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years. %
How much should you deposit in an account so that you can withdraw $5300 every year for the next18 years. 6 percent interest rate
21. You buy a house for $400,000. You pay off the loan with monthly payments over 30 years at a nominal interest rate i(2) = 3.25%, convertible semiannually. Find the amount of your monthly payments and the total amount of interest you will pay over the life of the loan and the percentage of your total payments that went towards interest.
Choose the best answer Compute the future value in year 5 of a $2,000 deposit in year 1 and another $2,500 deposit at the end of year 3 using a 6% interest rate. a. $5,333.95 b. $5,653.99 c. $5,850.00 d. $6,022.02
Suppose you have $2,300 and plan to purchase a 10-year certificate of deposit (CD) that pays 10.4% interest, compounded annually. How much will you have when the CD matures? a. $2,539.20 O b. $6,896.80 O c. $6,186.12 O d. $6,339.32 e. $5,603.37 O
If Alvin invest 5500 to day in a saving account. The money will grow to 8500 at the end of the year 4. Assuming that the interest is paid once per year, the effective annual rate of the invent is a. 12.2 b. 12.9 c. 11.5 d. 13.6 E. 10.8
Bill would like advice on investing in a $70,000 2-year ‘snowball’ fixed deposit providing an interest rate of 5% p.a. with interest paid half-yearly. The interest paid is reinvested back into the fixed deposit which is the basis for the ‘snowball’ description. On maturity, the investment provides a bonus interest amount of $500 for all investments that have a balance at maturity that exceeds their initial investment by more than 10%. Bill is subject to a 40% effective tax rate for interest income derived in the first year and 30% for the second year. Bill has sought your assistance in determining whether he would be eligible for the interest bonus and also to calculate his total after-tax net income from the investment.
If you borrow $5,400 at a simple interest of 5% per year, how much will be repayed after 6 years? a. $7,020 b. $5,670 c. $7,237 d. $1,620 e. $1,837 Clear my choice
You want to take out a $250,000 mortgage (home loan). The interest rate on the loan is 5% and the loan is for 25 years. How much will your semi- monthly payments be? a. $655 $622 c. $730 O d. $680 e. $752 O b.
9. I wish to borrow $400,000 to buy a house. If the current interest rate on the loan is 4.8% per annum, then my monthly repayment at the end of every month for the next 30 years is: Select one: a. $2,908.66 b. $2,098.66 c. $2,090.30 d. $1,111.11
Suppose you borrowed $35,000 at a rate of 8.1% and must repay it in 4 equal installments at the end of each of the next 4 years. How large would your payments be? O a. $7,755.76 O'b. $11,585.00 O c. $11,948,43 O d. $9,797.19 O e. $10,590.76
How much do you have to deposit today so that beginning 11 years from now you can withdraw $12,000 a year for the next 6 years (periods 11 through 16) plus an additional amount of $24,000 in the last year (period 16)? Assume an interest rate of 9 percent.

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