Homework Answers
| a) | As time horizon of investment in account of Jackson is double(i.e. 10 years) than that of Omar(i.e. 5 years), Jackson will get slightly greater return even rate of interest that Jackson is earning is 5% which is half of Omar. | |||||
| This is because of compounding effect of the amount in a long duration. Interest earned on interest offsets the lower interest rate. However, if the horizon of investment is small interest on interest earned is less. | ||||||
| b) | Value of investments | 162.88946 | ||||
| 161.05100 | ||||||
| Investment value of jackson = | Intial amount * (1+rate of interest)^(period of investment) | |||||
| Investment value of jackson = | 100*(1.05)^10 | |||||
| $162.89 | ||||||
| Investment value of Omar = | Intial amount * (1+rate of interest)^(period of investment) | |||||
| Investment value of jackson = | 100*(1.10)^5 | |||||
| $161.05 | ||||||
Add Answer to:
of 5% per year for 10 years. Omar Example 5 Jackson invests $100 in an account...
Nandana invests $500 at the start of each year for 20 years in a bank account...
Nandana invests $500 at the start of each year for 20 years in a bank account paying interest at the effective annual rate i. She takes the interest paid at the end of each year and invests it in a different account paying an effective annual rate i/2. The effective annual rate she earns on her combined investments is 6%. a) How much money does she have at the end of 20 years? (Total of both accounts.) b) What is...
4) Nandana invests $500 at the start of each year for 20 years in a bank...
4) Nandana invests $500 at the start of each year for 20 years in a bank account paying interest at the effective annual rate i. She takes the interest paid at the end of each year and invests it in a different account paying an effective annual rate i/2. The effective annual rate she earns on her combined investments is 6% a) How much money does she have at the end of 20 years? (Total of both accounts.) b) What...
2. Donny invests $100 at the end of each year for 5 years into an account...
2. Donny invests $100 at the end of each year for 5 years into an account paying simple interest of i% per year. The value of his investment at the end of the 5th year is $591. Calculatei 3. Given an amount function A(t)-212 +31+4·12 0, t in years, find the following: (a) The effective rate of interest in year 2 (b) The effective rate of discount in the 4th year (c) The corresponding accumulation function. (d) In the amount...
A couple invests $8,705.00 today in a money market fund that pays 6.00% per year. What...
A couple invests $8,705.00 today in a money market fund that pays 6.00% per year. What is the value of this account in exactly one year? A loan shark offers to give you $5,274.00 today, but, in exchange, he wants you to pay him $6,876.00 in one year. What is the rate of interest being charged on the account? A young graduate looks to save money to buy a house 4.00 years from today. He is somewhat conservative and will...
Tony Jackson invests $58,800 at 10% annual interest, leaving the money invested without withdrawing any of...
Tony Jackson invests $58,800 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Tony withdraws the accumulated amount of money. Compute the amount Tony would withdraw assuming the investment earns simple interest. (Round answers to 0 decimal places, e.g. 458,581.) Total withdrawn s e Textbook and Media Click here to view factor tables Compute the amount Tony would withdraw assuming the investment earns interest compounded...
A person invests$1000 per year in a fund, for 10 years, and then stops makingpayments. If...
A person invests$1000 per year in a fund, for 10 years, and then stops makingpayments. If money is worth 8% per year, what is the value in the fund at the end of 20years
Mark saves a fixed percentage of his salary throughout each year. This year he saved $1500. For the next 5 years, h...
Mark saves a fixed percentage of his salary throughout each year. This year he saved $1500. For the next 5 years, he expects his salary to Increase at an 8% annual rate, and he plans to increase his savings at the same 8% annual rate. He Invests his money evenly twice a year In the stock market. There thus will be six midyear investments and six end of year investments. Solve the problem by using the geometric gradient factor 1....
If Jackson deposits $100 at the end of each month in a savings account earning interest...
If Jackson deposits $100 at the end of each month in a savings account earning interest at a rate of 3%/year compounded monthly, how much will he have on deposit in his savings account at the end of 6 years, assuming he makes no withdrawals during that period? (Round your answer to the nearest cent.)
A $50,000 deposit earns 6.75% for ten years. If the account loses 2.5% per year after...
A $50,000 deposit earns 6.75% for ten years. If the account loses 2.5% per year after that for three years. what is the value of the account at the end of that third year? (Dollar) Ten years ago, Ralph invested $20,000 and locked in a 6.5 percent annual interest rate for 30 years (end 20 years from now). Lauren can made a twenty year investment today and lock in 5.65 percent interest rate. How much money should she invest now...
Jackson deposits $160 each month into a savings account earning interest at the rate of 7%...
Jackson deposits $160 each month into a savings account earning interest at the rate of 7% per year compounded monthly. How much will he have in this account at the end of 8 years?
4) Nandana invests $500 at the start of each year for 20 years in a bank account paying interest at the effective annual rate i. She takes the interest paid at the end of each year and invests it in a different account paying an effective annual rate i/2. The effective annual rate she earns on her combined investments is 6% a) How much money does she have at the end of 20 years? (Total of both accounts.) b) What...
2. Donny invests $100 at the end of each year for 5 years into an account paying simple interest of i% per year. The value of his investment at the end of the 5th year is $591. Calculatei 3. Given an amount function A(t)-212 +31+4·12 0, t in years, find the following: (a) The effective rate of interest in year 2 (b) The effective rate of discount in the 4th year (c) The corresponding accumulation function. (d) In the amount...
Tony Jackson invests $58,800 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Tony withdraws the accumulated amount of money. Compute the amount Tony would withdraw assuming the investment earns simple interest. (Round answers to 0 decimal places, e.g. 458,581.) Total withdrawn s e Textbook and Media Click here to view factor tables Compute the amount Tony would withdraw assuming the investment earns interest compounded...
Mark saves a fixed percentage of his salary throughout each year. This year he saved $1500. For the next 5 years, he expects his salary to Increase at an 8% annual rate, and he plans to increase his savings at the same 8% annual rate. He Invests his money evenly twice a year In the stock market. There thus will be six midyear investments and six end of year investments. Solve the problem by using the geometric gradient factor 1....
If Jackson deposits $100 at the end of each month in a savings account earning interest at a rate of 3%/year compounded monthly, how much will he have on deposit in his savings account at the end of 6 years, assuming he makes no withdrawals during that period? (Round your answer to the nearest cent.)
A $50,000 deposit earns 6.75% for ten years. If the account loses 2.5% per year after that for three years. what is the value of the account at the end of that third year? (Dollar) Ten years ago, Ralph invested $20,000 and locked in a 6.5 percent annual interest rate for 30 years (end 20 years from now). Lauren can made a twenty year investment today and lock in 5.65 percent interest rate. How much money should she invest now...
Most questions answered within 3 hours.
-
A bicyclist starting at rest produces a constant angular
acceleration of 1.10 rad/s2 for wheels that...
asked 8 minutes ago -
The
half-life of a radioactive source is 14.0 minutes. How much time
must elapse before the...
asked 5 minutes ago -
Given P(Ec ) = 0.43, P(F) = 0.52, and P(EF) = 0.18.
Find P( E |...
asked 52 minutes ago -
Consider two empty containers A and B whose volumes are
10mL and 20mL respectively. 1mL of...
asked 55 minutes ago -
QUESTION 6
Determine the linear momentum of a 2,800 kg houseboat going 3
m/s.
9,100 kg.m/s...
asked 1 hour ago -
Jor-el throws a ball upward from the top of a 728 foot building
on the planet...
asked 1 hour ago -
Which of the following will most likely to happen if Federal
Reserve Bank decreases the money...
asked 56 minutes ago -
You’ve just joined the investment banking firm of Dewey,
Cheatum, and Howe. They’ve offered you two...
asked 50 minutes ago -
An air conditioner cools 226 m^3/min of humid air at 36 oC and
98% relative humidity...
asked 50 minutes ago -
Vaughn Manufacturing acquires a coal mine at a cost of $1870000.
Intangible development costs total $354000....
asked 59 minutes ago -
Question 5
What effect would a decrease in
temperature have on pressure, assuming that volume
(T)...
asked 1 hour ago -
Draw the Lewis dot structures for the following molecules. None
of the atoms have a formal...
asked 1 hour ago