Question

w ost at the bar. What is the finance charge for this billing period: ** J .Un April 1, Sally bought 14. If John and Sue deposit $20.000 n a college account for their account when the grandchild turns 18 assuming th $44,409 15. How much interest did the account earn? About $24,409 16. What is the annual yield for this account? 4.53% 17. For their second grandchild they hope to have ye account for their first grandchild, how much will be in the s To assuming the account pays 4.5% compounded monthly! About cuma grandchild they hope to have $50,000 when the grandchild turns 18. If the interest rate ame for the second grandchild, how much should be deposited now to achieve their goal? About $22,518

Answer 1

Monday 25 May '98 ANSWER 14. Inu. Amount: $29000 Time 18 years with monthly compounding Therefore, Time will be loy cars & 12 months ine.. 216 Rate of gut!: 4.5% p.a. 4.5 .31 iie..0027 12 per month Value of fund = Px (14 e = 20000 x (17.0037) = $44,410 04 49 $44,409.62 2:16 Tuesday 26 Interest - Px (1+) - 16 = 20,000 x 117,0037) - 20,000 = $42, 409-62-$20,000 = $ 24,409.68 or say $ 24,410 MTWTFSS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 JUN'98 .

May '98 Friday 29 Anual Yield = (1+92)* - 1 Here, er will be same isto .0037 t = 12 months lol. 12 & Annual lieda=. = 117.00 37 )2-1 = 1.0453 - = .0453 o say 4.53%

28 Thurday Maturity Amount = $50,000 Time Yt) = 18 years with monthly compounding & Time will be 18 years y 12 mentiva = 216 Rate of Onterest (31) = 4,5% p-a. .4.5 = 375 % pere morette lol. 10037 Inveokit Amount Maturite Amount 117.0037) = $ 50,000 = $ 22,517,45 o say 2.2205 F S S MTWT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 MAY'98 $22,512