The balance of an interest-bearing account can be modeled by an exponential equation. For example, consider an initial deposit of $10000 at an annual interest rate of 5%. The interest earned each year is deposited into the account at the end of the year. A. Assuming that no withdrawals or deposits are made, write an equation that models the account balance after x years. Your answer B. What is the account balance at the end of the 7 years? Your answer C. Create a graph that shows the increase in the account balance over the next 15 years, including your initial deposit. Your answer

The balance of an interest-bearing account can be modeled by an exponential equation. For example, consider an initial deposit of $10000 at an annual interest rate of 5%. The interest earned each year is deposited into the account at the end of the year. A. Assuming that no withdrawals or deposits are made, write an equation that models the account balance after x years. Your answer B. What is the account balance at the end of the 7 years? Your answer C. Create a graph that shows the increase in the account balance over the next 15 years, including your initial deposit. Your answer

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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An amount of $124 is paid at the end of every month into an account. If the nominal interest rate is 3.02% compounded semiannually, how long (in years and months) will it take for the payments to accumulate to an amount of $6,455.41? Use the integer value of N to calculate years and months. |CN = |2 P/Y = 12 I/Y = 3.02 FV 6,455.41 PMT = $ -124 = years N= 192 to the nearest integer) PV = $14,892.17 X x (round = month(s)
You put $7,364 in the bank for 13 years at 7%. Using the Future Value of 1 Table, what factor would you use to calculate the future value of your deposit? Round to four decimal places.
A bank features a savings account that has an annual percentage rate of r=3.4% with interest compounded weekly. Alfonso deposits $11,500 into the account. The account balance can be modeled by the exponential formula S(t)=P(1+r/n)^nt, where S is the future value, P is the present value, rr is the annual percentage rate, nn is the number of times each year that the interest is compounded, and tt is the time in years. What values should be used for P, r, and n?P= , r= , n= How much money will Alfonso have in the account in 10 years?Answer = $ .Round answer to the nearest penny. What is the effective annual rate for the savings account?effective rate = %.Round answer to 3 decimal places.
Suppose that you deposited $5,999 at the end of each year in a Roth IRA account earning an annual rate of 5.01% for the next 15 years. How much would be on deposit at the end of the 15th year? In the space below, please indicate what the following variables are (enter answers to four decimal places and be mindful as to whether the variable is a positive or negative number): 1. PV 2. FV 3. Rate % 4. Periods 5. Payment
Suppose $1,200 is deposited into an account which has an annual percentage rate of 9.81% per year. Assume it remains in the account for 18 years and no additional money is added to the account other than interest. (a) Complete the boxes below to write an expression for the amount (in dollars) at year x = 18, of assuming interest is compounded annually. Do not round any values. You can enter arithmetic expressions (containing +, -, *, /, or ^) in any of these boxes. Number 1200 •( Number What is the value in year x = 18 of an investment of $1,200 dollars which pays 9.81% compounded annually? $ Number (Round to the nearest 0.01 dollars) (b) Complete the boxes below to write an expression for the amount (in dollars) at year x = 18, assuming interest is compounded weekly (52 times per year). Do not round any values. You can enter arithmetic expressions (containing +, –, *, /, or ^) in any of these boxes. Number 1200 ( Number What is the value in year x = 18 of an investment of $1,200…
Given below are the future value factors for 1 at 11% for one to five periods. Interest is compounded annually at 11%. Periods Future Value of 1 at 11% 1. 1.110 2. 1.232 1.368 1.518 5 1.685 What amount should be deposited in a bank account today to grow to $27400 three years from today? $27400 x 1.368 x 3 $27400 + 1.368 $27400 + 1.110 x 3 $27400 x 1.368 3. 4.
Suppose you invest $1,250 in an account paying 8% interest per year. a. What is the balance in the account after 3years? How much of this balance corresponds to "interest on interest"? b. What is the balance in the account after 31 years? How much of this balance corresponds to "interest on interest"?
Use the formula for continuous compounding to compute the balance in the account after 1,5, and 20 years. Also, find the APY for the account. A $14,000 deposit in an account with an APR of 2.5 % .
If the annual interest rate is 8%, what is the daily interest rate that would be used as the "r" in the time value of money equation? Hint: the equation uses the decimal equivalent of the percent Enter your answer to four decimal places.
You are told that a note has repayment terms of $1,700 per quarter for 6 years, with a stated interest rate of 8%. How much of the total payment is for principal, and how much is for interest? Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, eg. 5,275.25.) Total payment for principal Total interest Determine if the total interest will be higher or lower than with an annual payment. The total interest will be than with an annual payment.
Compute the future values of the following annuities first assuming that payments are made on the last day of the period and then assuming payments are made on the first day of the period: (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Payment $ 183 5,155 75,084 167,932 Years 13 8 5 9 Interest Rate (Annual) 12% 11 13 4 Future Value (Payment made on last day of period) 4 Future Value (Payment made on first day of period)
You invest $500 in an account that earns $10 interest each year at each year a) at the end of 24months , what is the balance b) at the end of 30months, what is the balance c) at the end of 5years, what is the balance d) find the linear equation that gives the balance after t years

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