You deposit $500 in an account earning 7% compound interest for 3 years. Find the future value and the interest earned for each of the following compounding frequencies. Use the Bankers' Rule for daily compounding. Frequency Future Value Interest Earned Annually: Semiannually: Quarterly Monthly Daily:

You deposit $500 in an account earning 7% compound interest for 3 years. Find the future value and the interest earned for each of the following compounding frequencies. Use the Bankers' Rule for daily compounding. Frequency Future Value Interest Earned Annually: Semiannually: Quarterly Monthly Daily:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 26P

See similar textbooks

Related questions

Q: You make periodic deposits of $100 at the end of every six months to an account that pays 4.5%…

A: Part a: Calculating the Future Value of the Account 1. Interest Rate Per Period: The interest rate…

Q: e future value and the interest earned

A: Future value refers to the amount of the current asset at some future date based on the assumption…

Q: You deposit $2,500 at the end of the year (k = 0) into an account that pays interest at a rate of 7%…

A: Saving Account is a deposit facility offered by commercial banks to their customers which gives them…

Q: Find the future value of each deposit if the account pays (a) simple interest, and (b) interest…

A: Future value is the value of current cashflow compounded at specified rate to future date.

Q: Suntech Distributors, Inc., deposits $4,000 at the beginning of each 3-month period for 7 years in…

A: Formula: A = P [ 1 + ( r / N )NT ] Interest : Interest is a fee charged on the borrowed amount.

Q: Your bank pays 4% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: Compounding interest semiannually indicates that the principle of a loan or investment includes the…

Q: Find the periodic withdrawals PMT for the given annuity account. (Assume end-of-period withdrawals…

A: Given: Future value = $400,000 Interest rate = 6% Years = 18

Q: Suppose on January 1st you deposit $100 in an account that pays a nominal interest rate of 11.33463%…

A: Principal, P = $ 100Nominal interesr rate = Inom = 11.33463% Daily interest rate, Rdaily = Inom /…

Q: You deposit $700 at the end of each month into an account earning interest at an annual rate of r…

A: Future value of annuity Annuity is a series of equal payments at equal interval over a specified…

Q: Determine the value at the end of five years of a $7,000 investment (today) in a bank certificate of…

A: Future Value = Present Value * (1+rate)^n Where, Rate = 9%/2 = 0.045 n = no. of compounding period =…

Q: Suppose you make quarterly deposits of $1,500.00 into an account that pays an interest at a rate of…

A: Answer: Calculation of the balance in the account at the end of year 2: Formula, we will use here,…

Q: Compute the annual interest, total interest, and amount to be received or paid at the end of the…

A: A method of computing interest amounts in which the compounding effect was not considered by the…

Q: You deposit $5100 in an account earning 4% compound interest for 3 years. Find the future value and…

Q: Find the future value of a deposit of $15000 at 6% interest compounded monthly for 11 years.

A: As per the guidelines if multiple questions are asked at once, then the solution for the first…

Q: You decide to deposit $103 monthly in a 2.98% annual interest bearing account over the next 8 years.…

A: Gross amount placed in the account is simply the sum of all the payments made in the account.

Q: A deposit is made every half-year into a savings account paying 3% interest compounded semiannually.…

A: Annual interest rate (r): 3%, or 0.03 as a decimal.Compounding periods per year (n): 2 (semiannual…

Q: Your bank offers 3 percent annual interest onsavings deposits. If you deposit $560 today, howmuch…

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: You plan to deposit $5, 706 into a savings account paying 8% interest compounded quarterly. How much…

A: whereFV = Future value = amount at the endPV = Present value = amount deposited today = $5,706i =…

Q: You deposit $400 in an account earning 8% coumpound interest for 2 years. Find the future value and…

A: Given That: P=$400 r=0.08 t=2 years

Q: Suppose that $3000 is deposited in a saving account at the rate of 8% per year. Determine in details…

A: Given data, Principal (P) = $3000 Interest rate (r) = 8% per year…

Q: You deposit $300 in an account earning 8% coumpound interest for 3 years. Find the future value and…

A: Following information are given: Amount deposit = $300 Rate = 8% Time = 3 years 1. For annual…

Q: You are about to borrow $8,000 from a bank at an interest rate of 8% compounded annually. You are…

A: The money which is taken as a loan from the bank or from any financial institution is known as…

Q: You deposit $100 in an account earning 4% coumpound interest for 5 years. Find the future value and…

A: Future Value: It represents the future worth of a present amount and is estimated by compounding…

Q: What amount must be deposited today, if, starting one year from today, you wish to make 15 equal…

A: Given, annual withdrawals $3,450. Number of payments 15. Interest rate is 0%.

Q: Find the future value and the interest earned for each of the following compounding frequencies.

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: A bank pays 6% interest compounded semiannually. Use appropriate formula to find out how much should…

Q: If you borrow $7,300 at $800 interest for one year, what is your effective interest rate for the…

A: The effective rate of interest is the return on savings or interest on investment that takes into…

Q: A depositor opens in your savings account with $5000 at 5% compounded semiannually at the beginning…

A: Initial Balance in account is $5000 Interest rate is 5% Compounded semi-annually Amount deposited at…

Q: A deposit of $2500 is made into an account drawing 3.6% interest compounded monthly. Find the future…

A: The future value concept can be used to derive the future value of a present sum or the future value…

Q: Every year you deposit $3,500 into an account that eams 1% Click the icon to view the interest and…

A: As you deposit money into the annuity account the interest accumulated over the period of time and…

Question

You deposit $500 in an account earning 7% compound interest for 3 years. Find the future value
and the interest earned for each of the following compounding frequencies. Use the Bankers'
Rule for daily compounding.
Frequency
Future Value
Interest Earned
Annually:
Semiannually-
Quarterly:
Monthly
Daily:

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Calculation of Future value and interest earned annually

VIEW

Step 3 Calculation of Future value and interest earned Semi annually

VIEW

Step 4 Calculation of Future value and interest earned Quaterly

VIEW

Step 5 Calculation of Future value and interest earned monthly

VIEW

Step 6 Calculation of Future value and interest earned daily

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 6 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Use Future Value and Present Value Tables to Apply Compound Interest to Accounting Transactions Kristen Quinn makes equal deposits of $500 semiannually for 4 years. Required: What is the future value at 8%? (Note: Round answers to two decimal places.)
You deposit $400 in an account earning 8% coumpound interest for 2 years. Find the future value and the interest earned for each of the following compounding frequencies. Use the Bankers' Rule for daily compounding. Frequency Future Value Interest Earned Annually: Semiannually: Quarterly: Monthly: Daily:
If you borrow $7,500 at $550 interest for one year, what is your effective interest rate for the following payment plans? (Input your answers as a percent rounded to 2 decimal places.) a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments Effective Rate of Interest % % %
If you borrow $7,300 at $800 interest for one year, what is your effective interest rate for the following payment plans? Note: Input your answers as a percent rounded to 2 decimal places. a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments Effective Rate of Interest % % % %
You deposit $5100 in an account earning 4% compound interest for 3 years. Find the future value and the interest earned for each of the following compounding frequencies. Round all answers to two decimal places where applicable. Enter positive values for the Interest Earned. (For this question: 1 year = 365 days, including leap years) Frequency Semiannually Daily > Next Question (P/Y = C/Y) N Future Value FA $ Interest earned
Determine the periodic deposit. Round up to the nearest dollar. How much of the financial goal comes from deposits and how much comes from interest? A=P(1+r)t−1r A=P1+rnnt−1rn P=Arn1+rnnt−1 Periodic Deposit: $? at the end of each month Rate: 7.5% compounded monthly Time: 3 years Financial Goal: 34,000
You have taken a loan of $92,000.00 for 35 years at a 4.9% annual interest rate, with interest compounded quarterly. Fill in the amortization table below to show how the payments will be applied to interest and principal: (Round all answers to 2 decimal places. Please note the order of the headings in the table - make sure you put the answers in the appropriate columns as layed out below.) Payment number Payment amount Principal Amount Interest 0) 1) 2) 3) $ LA tA +A LA $ Balance $92,000.00 tA LA
Find the annual simple interest rate of a loan, where $900 is borrowed and where $1008 is repaid at the end of 18 months. Annual simple interest rate = %. Preview My Answers Submit Answers
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate Time Financial Goal $? at the end of each year 3% compounded annually 18 years $140,000 a.The periodic deposit is $_______. (Do not round until the final answer. Then round up to the nearest dollar asneeded.)
Suppose you invest $1,000.00 in an account with an annual interest rate of 6% compounded monthly (6%÷÷12 = 0.5% each month). At the end of each month, you deposit $275.00 into the account.Use this information to complete the table below. Round to the nearest cent in each step as needed. Month Prior Balance 0.5% Intereston Prior Balance Monthly Deposit Ending Balance 0 $1,000.00 1 $1,000.00 $275.00 2 $275.00 $1,561.40 3 $1,561.40 $275.00 4 $9.22 $275.00
Investigate the effect of the interest rate on home loans by finding the monthly payment and the total interest for a twenty-year simple interest amortized loan of $150,000 at the following rates. (Round your answers to the nearest cent.) (a) 6% payment $ total interest $ (b) 7% payment $ total interest $ (c) 8% payment $ total interest $ (d) 9% payment $ total interest $ (e) 10% payment $ total interest $ (f) 11% payment $ total interest $
If you borrow $5,300 at $900 interest for one year, what is your annual interest cost for the following payment plan? (Round the final answers to 2 decimal places.) Effective rate a. Annual payment % b. Semiannual payments % c. Quarterly payments % d. Monthly payments %