The local bank is currently offering a new investment product, where deposits earn interest according to the following scheme: 4 . An interest rate of r is applied on the 15th day of each month. . A bonus interest rate of this applied on the 30th day of every odd month. (These are the months of January, March, May, July, September, and November.) 1. Suppose that you want to deposit an amount of l' dollars into the account twice: on January 1 and August 1 in 2023. If you want the value of your investment to be S by April 30, 2024, express in terms of S, r, and t. (Note that r and t are not APRs.) 2. What is the effective annual rate of the above compounding scheme?

The local bank is currently offering a new investment product, where deposits earn interest according to the following scheme: 4 . An interest rate of r is applied on the 15th day of each month. . A bonus interest rate of this applied on the 30th day of every odd month. (These are the months of January, March, May, July, September, and November.) 1. Suppose that you want to deposit an amount of l' dollars into the account twice: on January 1 and August 1 in 2023. If you want the value of your investment to be S by April 30, 2024, express in terms of S, r, and t. (Note that r and t are not APRs.) 2. What is the effective annual rate of the above compounding scheme?

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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One bank offers to loan you money at an interest rate of 12% compounded quarterly, and another bank offers to loan you money at 11.8% compounded continuously. Which loan would you prefer, and why?
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You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) AmountFinanced Number ofPayments MonthlyPayment PaymentsMade RebateFraction FinanceChargeRebate LoanPayoff $1,700 18 $123.89 12
24) One of the local banks indicates that it computes the interest it pays on savings accounts by the continuous compounding method. Suppose you deposited $100 in the bank and they pay 4% per annum, compounded continuously. After 5 years, how much money will there be in the account? Select one: a. $ 122.14 b. $ 144.14 c. $ 322.14 d. $ 222.14 25) At 10% per year simple interest, how long will it take for a deposit of $1000 now to accumulate to $100,000? Select one: a. n=99 years b. n=50 years c. n=44 years d. n= 990 years 26) When only one alternative can be selected from two or more, the alternatives are said to be: Select one: a. subjective alternatives b. independent alternatives c. revenue alternatives d. mutually exclusive
Suppose Jorge Otero has set up an annuity due with a certain credit union. At the beginning of each month, $130 is electronically debited from his checking account and placed into a savings account earning 6% interest compounded monthly. What is the value (in $) of Jorge's account after 17 months? (Round your answer to the nearest cent.)
You, as a University of Bahrain Business School student, plan to make a series of deposits in an interest-bearing account at National Bank of Bahrain (NBB) for thefuture. You will deposit at the end of each year, BHD 55,692, BHD 55,860, BHD 41,636, BHD 29,398 and BHD 57,276 respectively. If the interest rate is 6%, howmuch will you have after 5 years?
Suppose Jorge Otero has set up an annuity due with a certain credit union. At the beginning of each month, $140 is electronically debited from his checking account and placed into a savings account earning 6% interest compounded monthly. What is the value (in $) of Jorge's account after 17 months? (Round your answer to the nearest cent.)
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