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- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
- Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?Suppose a bank pays you 2% annual interest compounded quarterly. You deposited $2,350. How much will you have in your account in 3 years?How much do you need to deposit into a bank in order to receive proceeds of $200,000 in 5 years if the interest rate is 2.5% What if interest is compounded quarterly?
- Suppose a bank pays you 4% interest compounded quarterly. You deposited $10,000. How much will you have in your account after three years?If you take out a 4 year loan for $16,500 at your bank and pay the quarterly payments for the 4 years and the loan is 5.15% interest compounded quarterly, then the amount of total interest that you pay the bank is?If you deposit $100 in a savings account at the end of each month for 2 years, the balance will be a function f (r) of the interest rate, r%. At 7% interest (compounded monthly), f (7) = 2568.10 and f (7) = 25.06. Approximately how much additional money would you earn if the bank paid 7 1/2 % interest?
- How much must you deposit in the bank today if you want to have $1,500 after 4 years? Interest rate is 11%, compounding is annual.You deposit $10,000 in an account earning 4% interest compounded monthly.a. How much will you have in the account in 25 years?b. How much interest will you earn?You owe $19,000 on student loans at an interest rate of 4.6% compounded monthly. You want to pay off the loan in 6 years. What will your monthly payments be? How much interest do you pay?
