You bought $5,000 worth of mutual fundswith a redemption fee of 5 percent. If yousell within the first year you will be charged5%. The fee decreases 1 percent each yearafterward. If you sell during the third year,how much will be the redemption fee rate?DO NOT INCLUDE PERCENTAGE SIGN.Type your responseSubmit

Introduction: Mutual Fund Redemption fees are the fee charged by the mutual fund company from the…

Answered: You bought $5,000 worth of mutual funds…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1.1) For $20,000, you can purchase a five-year annuity that will pay $5000 per year for five years. The payments occur at the end of each year. a) Calculate the effective annual interest rate implied by this arrangement. 1.2) If you invest $1000 at 11% APR for five years, how much would you have at the end of 5 years? a) Calculate using simple interest. b) Calculate using compound interest.
3. Suppose that you have a savings plan that pays 2.5% compounded monthly. You make payments of $75 at the end of each month for 15 years, and then you make monthly payments of $110 for an additional 6 years. a) What is the value of the account at the end of 21 years? b) How much did you earn in interest during those 21 years? 4. Three years after buying 200 shares of XYZ stock for $25 per share, you sell the stock for $8,500. Find the total and annual return.
Suppose you invest $50 each month (starting today) into a mutual fund. You reinvest distributions. At the end of 5 years, you sell all your shares and receive $3,485. Calculate your rate of return.
You invest $100 into a CD offering 5% APR with semi-annual compounding (i.e., two times per year). How much money will you have in the account after 1 year? 118.54 120.00 105.06 125.32
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Suppose you invest $210,000 in an annuity that returns 6 annual payments, with the first payment one year from now and each subsequent payment growing by 5%. At an interest rate of 8%, how much is the first annual payment you receive? Equivalent problem structure (as a borrower): Suppose you borrow $210,000 to be paid back over 6 years with the first payment one year from now and each subsequent payment growing by 5%. At an interest rate of 8%, how much is the first annual payment? Please round your answer to the nearest hundredth.
Suppose you deposit $650 per month in a mutual fund that is expected to bear 10% interest compounded monthly. If you do this faithfully, how much will your account be worth after 29 years? Round your answer to the nearest whole number.
You currently have $15,804. You plan on investing it at 20 percent per year until you have $68,555. How long will you wait until you achieve this goal? Enter the answer with 2 decimals (e.g. 1.23).
You buy a mutual fund for $1,000. It annually distributes $60 for eight years, after which you sell the shares for $900. What is the annualized return on your investment?
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Suppose you deposit $550 per month in a mutual fund that is expected to bear 9% interest compounded monthly. If you do this faithfully, how much will your account be worth after 27 years? Round your answer to the nearest whole number.
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You bought $5,000 worth of mutual funds with a redemption fee of 5 percent. If you sell within the first year you will be charged 5%. The fee decreases 1 percent each year afterward. If you sell during the third year, how much will be the redemption fee rate?