You are considering moving your money to a new bank offering a one-year CD that pays an 8% APR with monthly compounding. Your current bank’s manager offers to match the rate you have been offered. The account at your current bank would pay interest every six months. How much interest will you need to earn every six months to match the CD?

Q: Your bank pays 2.3% interest per year. You put $1.100 in the bank today and $500 more in the bank in…

A: Year 0 Deposit = $1,100 Year 1 Deposit = $500 Interest rate = 0.023 Amount in the bank in 2 years =…

Q: You need to borrow $12,000 to buy a car, so you visit two banks and are given two alternatives. The…

A: Loan is a contract between lender and borrower where lender provide funds to borrower which repaid…

Q: Suppose your bank account pays interest monthly at an effective annual rate of 6% with monthly…

A: The effective annual interest rate aids investors and borrowers in understanding the true cost or…

Q: You purchase a new laptop for $1200 and put it on your credit card, which charges 14.99% interest.…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: Suppose you borrow $21,000 from your bank to buy a car.  You agree to pay $433.89 per month for 60…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: You have an outstanding loan currently. The bank requires you to pay in three installments at the…

A: Bank Loan can be repaid like yearly or monthly or quarterly. Generally , every financial house…

Q: You have taken out a loan of $32,000 to buy a new Saturn. The loan will be paid off in monthly…

A: A loan is an agreement between two parties where an amount is changed in return for the amount being…

Q: Imagine you have $200 today and you think to save your money in a bank for 2 years. The Bank A says…

A: Interest rate is the rate which an investor may earn on the deposits in the banks or the investment…

Q: what is the largest down payment you can make at the end of three years (immediately after the last…

A: Value at the end of saving period comprises of monthly saving and interest on those savings.…

Q: In order to be able to buy the new machine, you take a loan of 2 million from the bank, which you…

A: Amortized loan: An amortized loan is a case of the present value of an ordinary annuity.The PV of an…

Q: You want to have $40,000 in your savings account 6 years from now, and you're prepared to make equal…

A: The concept of time value of money will be used here and that of annuities. The amount of $40,000 is…

Q: Suppose that you wish to buy a new home that will cost you $452,847. You must put $80,000 down, and…

A: Negative amortization means interest on the loan is not paid due which the loan amount tends to…

Q: How much will you have after 5 years? How much will you have after 5 years if you make the deposits…

A: Each year Deposit RM 2500 Interest Rate 4%

Q: Suppose you currently have $20,000 and plan to purchase a 8-year certificate of deposit (CD) that…

A: Using the Future value and NPER function in excel

Q: you want to be able to withdraw $30000 each year for 25 years. your account earns 8% interest. How…

A: Given, Amount able to withdraw = $30,000 each year Time period = 25 years Interest rate = 8%

Q: You are considering two ways of financing a spring break vacation. You could put it on your credit…

A: Given: Particulars Rate Credit card rate 14.000% Interest rate 10.00%

Q: sume that you plan to buy a condo 5 years from now and you need to save for a down payment. You plan…

A: solution given Annual deposit 2500 Interest rate 4% Number of years 5 years…

Q: suppose you start saving today for a 40000 down payment that you plan to make on a house in 8 years.…

A: Present Value is the current value of all the cash flows which is to be received in the future which…

Q: Your grandma is thinking of putting some of her retirement savings into a Term Deposit for one year,…

A: Given:

Q: You have received a post - dated check of $10, 000 that is payable in 2 years for a project you…

A: Option 1Option 2Amount (FV)$10,000.00$10,000.00Interest rate25%24%Number of years22Compounding…

Q: have an outstanding student loan with required payments of 550 per month for the next four years.…

A:

Q: A friend asks you for a loan of $1,000 and offers to pay you back at the rate of $90 per month for…

A: Monthly interest rate = Annual interest rate/12 = 0.10/12 = 0.008333333 Net present value(NPV) is…

Q: Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term…

A: When loan is taken from the bank, interest is charged on it. Interest can be charged by bank…

Q: You are considering purchasing a car with a sticker price of $50,000 (nonnegotiable with no down…

A: The amortization of loan refers to systematic, equal and regular repayment of loan. The instalment…

Q: You have an outstanding student loan with required payments of $500 per month for the next four…

A: given PMT = 500 r= 9/12 = 0.75% per monthn=12*4 = 48present value of the payment PV =…

Q: Suppose you want to have $7,876 for a vacation in the future. What will be the estimated total you…

A: future value formula: future value = present value ×1+rateyear future value of annuity…

Q: Your bank will pay you an interest rate of 0.102% per week. You want to have $22, 500 in 10 years.…

A: Future value=$22500Interest rate=0.102%Period=n=10 years=10 x 52=520 weeks

Q: You want to purchase a new car in 6 years and expect the car to cost $84,000. Your bank offers a…

A: A monthly deposit refers to an amount deposited every month for the accumulation of money at the end…

Q: Calculate your monthly payment. Round your answer to the nearest cent.

A: Loan Payments: These are payments made by the borrower to amortize the loan value. This is done by…

Q: Suppose you put $100 into a savings account today, the account pays a nominal annual interest rate…

A: Future Value Future Value is the value which is measured at a specified date at a given interest…

Q: You plan to buy a house in three years and would like to put $100,000 down at the time of buying.…

A: The concept of money's time worth reveals that any sum today is worth more as compared to what it…

Q: How much should you deposit now into a certificate of deposit (CD) at a bank, if the CD matures 10…

A: To calculate the principal amount deposit in the bank , we have to use the following formula : A = P…

Q: You deposit $1,700 into an account that pays 7% per year. Your plan is to withdraw this amount at…

A: The question is based on the concept of calculation of future value with compounding effect of…

Q: pose that after the 6-month grace period after you graduate college, you have $63,0 dent loan debt.…

A: As there is more compounding than there is going to be more effective interest rate and more is the…

Q: You have an outstanding student loan with required payments of $600 per month for the next four…

A: The real interest rate, often called the effective annual return (EAR), is an important financial…

Q: You are considering two ways of financing a spring break vacation. You could put it on your credit​…

A: The objective of the question is to determine which financing option has the lower interest rate.…

Q: You want to borrow $94,000 from your local bank to buy a new sailboat. You can afford to make…

A: Loan is an agreement between lender and borrower where lender provide funds to borrower which repaid…

Q: You plan to start saving now for a downpayment for a house in your RRSP. You deposit $750 every…

A: Future value is an estimated value of future cash flows ​​that may be received at a future date,…

Q: You are considering two ways of financing a spring break vacation. You could put it on your credit…

A: The modified rate of return for compounding interest into actual terms of time is called the…

Q: How much would you have if the account paid 4.25%?

A: We can determine the FV using the FV of annuity due formula as below:In the formula above PMT =…