Effective rate = (1+r)^n - 1
= ( 1 + 0.0155)^4 - 1
= ( 1.0155)^4 - 1
= 1.0635 - 1
= 0.0635 i.e 6.35%
Part B:
Continous Compounding = e^(r*t) - 1
= e^(0.05*1) - 1
= e^0.05 - 1
= 1.0513 - 1
= 0.0513 i.e 5.13%
Exercise 6. What is the effective rate for money invested at 6.2% compounded quaterly? And if...
If 3000 dollars is invested in a bank account at an interest rate of 6 per cent per year, find the amount in the bank after 12 years if interest is compounded annually Find the amount in the bank after 12 years if interest is compounded quaterly Find the amount in the bank after 12 years if interest is compounded monthly Finally, find the amount in the bank after 12 years if interest is compounded continuously
What is the APY for money invested at each rate? (A) 14% compounded quarterly (B) 13% compounded continuously % (Round to three decimal places as needed.) (A) APY
find the accumulated value of an investment of 25,000 for 4 years at an interest rate of 5%, if the money is a compounded semiannually; b. coumpounded quaterly; c. compounded monthly d. coumpounded continuously.
An investment pays 5% interest compounded continuously. If money is invested steadily at the rate of $14,000, how much time is required until the value of the investment reaches $140,000? The amount of time required is approximately years. (Type an integer or decimal rounded to the nearest hundredth as needed.)
A certain perpetuity pays the holder $300 per month. If the money is invested at a rate of 4% annually (compounded continuously), what is the present value of the perpetuity?
5. How long will it take money to double if it is invested at (A) 8% compounded semiannually? (B) 7% compounded semiannually? 6. Bank A offers a 2-year GIC that pays 4.82% compounded continuously and Bank B offers a 2-year GIC that pays 4.85% compounded quarterly. Find the annual percentage yield (or effective rate) for each one Which bank's GIC has the higher return?
Joe invested $25,000 in an account that will draw 6.9% interest compounded quarterly for the next 10 years while Susan invests $25,000 in an account that will draw 6.8% interest compounded continuously over the next 10 years. Who will have the most money at the end of the 10 years? What is the effective interest rate for 8% interest compounded daily?
MWENYI It is invested at 5% compounded continuously? Exercise 7. How long will it take to double an investment at 11.99% com- pounded bi-weekly? Exercise 8. You deposit $17,000 in a savings account. What rata namnaunda
7) A bank offers a credit card with an APR of 18 percent, with quaterly compounding. What is the effective annual rate (EAR)? 8)Which of the following investments will attain the highest future value? a) $1,300 invested at an annual interest rate of 6% for 12 years b) $1,500 invested at an interest rate of 4.75% (monthly compounding) for 10 years c) $1,300 invested at an interest rate of 3.25% (quaterly compunding) for 10 years 9)All other things held equal,...
Compounded Continuously 1. How much money will be in the account after 5 years if $2030 is deposited at 4% compounded continuously? 2. Determine the amount of interest earned in 5 years if $2030 is deposited at 4% compounded continuously? 3. Inflation is running at 0.8% per month when you deposit $3000 in an account earning 6% compounded continuously. In constant dollars, how much will you have 2 years from now? 4. Find the present value of $12,075 if money...