Answered: Your bank pays 4% interest annually.…

Your bank pays 4% interest annually. You have $2,500 invested in the bank. How long will it take for your funds to double? 14.39 15.15 15.95 16.79 17.67

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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Similar questions

Your bank pays 2.8% interest per year. You put $1,100 in the bank today and $650 more in the bank in one year. How much will you have in the bank in two years? In two years, the amount that you will have is $nothing. (Round to the nearest cent.)
17. You deposit $8,000 in a bank account today. You make another deposit of $14,000 into the account in year one and you make a third deposit of $10,000 in year two. The bank pays interest at 8 percent compounded annually. How much will you have in your account at the end of year 3? * O a) $37,207 b) $35,207 O c) $39,207 O d) $40,502 e) None of the above
If you want to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%?
An investor has accumulated $6,800 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 5%. A one-year bank certificate of deposit will pay 7%, but the minimum investment is $9,800. Required: Calculate the amount of return the investor would earn if the $6,800 were invested for one year at 5%. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 15%, and then $9,800 were invested for one year at 7%. Calculate the net rate of return on the investment of $6,800 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places.
You have just opened a savings account which pays monthly interest at a rate of j12 = 5.5% p.a. You wish to accumulate $20,000 by depositing the same amount into the account at the end of each month, for 2 years, starting in a month's time. a) Determine the required size for the monthly deposit, R. Apply a sanity check. b) Construct a sinking fund table showing 24 deposits with a fixed interest rate of 5.5%. Describe and apply a sanity check to your table. c) Suppose that the interest rate is renewed every three months (quarterly) over the course of the two years as follows: Year 1 Q1 5.5% 02 Q3 2.8% 4.5% 04 01 4.0% 4.2% Year 2 Q2 04 03 3.8% 2.5% 7.5% If you maintain the same monthly deposit of R determined in part a), find the size of your sinking balance after two years. Will you meet your target of $20,000? Describe and apply a sanity check for your answer. d) Construct a sinking fund table showing 24 deposits with the variable interest rate. Describe and apply a sanity check to…
3. Compound interest Old Time Savings Bank pays 4% interest on its savings account. If you deposit $1,000 in the bank and leave it there: a. How much interest will you earn in the first year? b. How much interest will you earn in the second year? c. How much interest will you earn in the tenth year?
5. You take $100 to your local savings bank to invest for five years. You are given the choice of two investments by the banker Notifications Time Left 00:00:28 ? Guide Me 1. You can Invest in a regular savings account that pays you 14.00% interest each year with interest compounded annually. That is each year the interest you can gets deposited in your bank account and earns interest until the end of the five years. it. You can invest in a special account that pays you 20.00% interest each year, the catch is that the interest does not compound, Rattier each year the interest payrrient is put into a special account which collects no further interest and cannot be reinvested anywhere until the end of the five years Which option should you select and why? a, Select Option i: It earns $44.63 more than Optianill b. Both Options earn you the same amount of money so you are indifferent between the two c. Select Option it It earns $7.46 more than Option d. Select Option it It earns $30.00…
K If your bank pays you 1.4% interest and you deposit $800 today, what will be your balance in five years? The bank balance will be S[ .... (Round to the nearest cent.)
An investor has accumulated $4,450 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 9%. A one-year bank certificate of deposit will pay 11%, but the minimum investment is $7,450. Required: a. Calculate the amount of return the investor would earn if the $4,450 were invested for one year at 9%. b. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 19%, and then $7,450 were invested for one year at 11%. c. Calculate the net rate of return on the investment of $4,450 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places. a. Amount of return b. Net amount of return c. Net rate of return %
It's the first day of the year and you currently have $3,500 in the bank. You plan to deposit $200 at the end of every year for the next 56 years, with the first payment made 1 year from now (payments from t=1 to t=56 inclusive). If bank interest rates are 1% pa, how much money will be in your bank account a moment after making your last deposit in 56 years? Question 3 Select one: a. $6,110.33 b. $14,654.33 c. $14,700 d. $21,026.53 e. $21,236.8
Your bank pays 6.50% interest. You have two planned outlays in the future. You need $5,800 in five years, and $6,300 in eight years. How much must you deposit today in order to makes these two withdrawals? $7,311.20 $8,831.56 $13,306.11 $8,039.97

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