Your Mark: Problem #10: A person's savings earns an effective annual rate of return of 11%. Income tax is paid on the interest earned at a rate of 40%. If the inflation rate is 4% per year, what is the annual after-tax real rate of return? Problem -10: CU Ciben Answer as a percentage. correct to 2 decimals: om #10 for Grading

Your Mark: Problem #10: A person's savings earns an effective annual rate of return of 11%. Income tax is paid on the interest earned at a rate of 40%. If the inflation rate is 4% per year, what is the annual after-tax real rate of return? Problem -10: CU Ciben Answer as a percentage. correct to 2 decimals: om #10 for Grading

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

Solve the problem. Round to the nearest cent. A=P1+rnnt P=A1+rnnt A=Pert Y=1+rnn−1 How much money should be deposited today in an account that earns 4% compounded semiannually so that it will accumulate to $4,000 in 4years?
The following table presents a series of income and expenses. Assume an interest rate of 5% per year. Years Income (LE) Expenses (LE) -71000 1-6 15000 -12000 7-9 37000 -18500 10-16 65100 -21700 Find the equivalent present value Find the equivalent value in year 6 Find the equivalent value in year 9 Find the equivalent value in year 16
3. A bank CD that pays 7.58 percent compounded annually. (Round answer to 2 decimal places, e.g. 15.25%.) what is the Effective annual rate %?
Suppose Eli deposits $1,000 into a savings account. The savings account earns4.2% compounded monthly. Find the APY for the account. Round the percent to two decimals.
Suppose the interest rate is 10.2 % APR with monthly compounding. What is the present value of an annuity that pays $ 119 every 6 months for 6 years? Question content area bottom Part 1 The 6 -month effective interest rate is 5.209 %. (Round to three decimal places.) Part 2 The present value is $enter your response here . (Round to the nearest cent.)
Calculate compound interest and effective rateSuppose $ 2,000 is deposited into a savings and loan account that pays 7.5% interest compounded semi-annually. Use compound interest to calculate the following:a. How much money will you have saved after 2 years?b. How much will be owed after 2 years?
The stated interest rate on your account is 7.2% interest paid quarterly your effective rate of interest API will be? Keep 4 decimal places
Using Table 11-1, compute the amount of compound interest (in $) earned in 1 year and the annual percentage yield (APY) for the investment. (Round your answers to two decimal places.) Compound Interest Earned in 1 Year Annual Percentage Yield (APY) Nominal Interest Principal Rate (%) Compounded $33,000 12 monthly $ % Need Help? Read It 3 Type here to search
= A bank features a savings account that has an annual percentage rate of r interest compounded quarterly. Tatiana deposits $9,000 into the account. The account balance can be modeled by the exponential formula A(t) = a (1 + 7-)kt, where A is account value after t years, a is the principal (starting amount), r is the annual percentage rate, k is the number of times each year that the interest is compounded. (A) What values should be used for a, r, and k? a = r = 5.6% with k = (B) How much money will Tatiana have in the account in 7 years? Answer = $ 7. Round answer to the nearest penny. APY = = %. Round answer to 3 decimal places. (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year).
Solve all parts
Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment. (Round your answers to the nearest cent.) Time Principal Period (years) Nominal Rate (%) Interest Compounded $26,000 11 5 annually $ Compound Amount $ Compound Interest
How much money should be invested in an account that earns 9% interest, compounded monthly, in order to have $11,000 in 5 years? (Round your answer to two decimal places.) a) $3256.18 b) $6423.16 c) $5436.12 d) $7025.70

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