You are considering investing in a European bank account that pays a nominal annual rate of...
You are considering investing in a European bank account that pays a nominal annual rate of 18%, compounded monthly. If you invest $5,000 at the beginning of each month, how many months would it take for your account to grow to $401,000? Round fractional months up. Select the correct answer. a. 55 b. 51 c. 53 d. 47 e. 49
Homework Answers
![Monthly deposits at the beginning of each month - S5,000 Future value required = $401,000 Nominal interest rate. I 18% * 1/12-1.5% Per month Term-n Here every monthly deposit making at the beginning of each month , hence we should use future value annuity due formula. Future value required Future value of monthly deposits (Annuity) $401,000 ( 1 +1 ) * Monthly, deposit * [( 1 +1Yn-1]/1 $401,000-(1+1.5% ) * $5,000 * [( 1 +1.5% ) n-1J/1.5% $401,000 = 1.015 * $5,000 * [( 1.015) n-1 ] / 0.015 401,000-$338,333.333 * [(1.015 n -1] [(1.015 n -1]-S401,000 /S338,333.3333 [(1.015 n -1]- 1.185221675 1.015 n - 1.185221675 +1 (1.015 Fn - 2.185221675 (1.015 n22 (Rounded) To compute required term , go for trail and error approach. If required term , n 53 Months L.H.S= (1.015)^53= 2.201406473= 2.2 (Rounded) = R.H.S Therefore , required term -53 Months Ans: 53 Months](http://img.homeworklib.com/questions/50110240-78b3-11ea-b776-436d521fd8ae.png?x-oss-process=image/resize,w_560)
Add Answer to:
You are considering investing in a European bank account that
pays a nominal annual rate of...
You are considering investing in a European bank account that pays a nominal annual rate of...
You are considering investing in a European bank account that pays a nominal annual rate of 18%, compounded monthly. If you invest $5,000 at the beginning of each month, how many months would it take for your account to grow to $108,000? Round fractional months up. Select the correct answer. a. 23 b. 13 c. 17 d. 15 e. 19
Joey tells Monica that he heard about this great C/D that pays a nominal rate of...
Joey tells Monica that he heard about this great C/D that pays a nominal rate of 18% compounded monthly. He thinks this is a great deal, even though it is from a Brazilian bank and is so it is based in reais. Ignoring FX, if he invests $5,000 at the beginning of each month, how many months will it take to for his account to grow to $170,000? Round fractional months up. Write the Formula to solve. A). 31 B)....
You just deposited $8,000 in a bank account that pays a 4.0% nominal interest rate, compounded...
You just deposited $8,000 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now? a. $20,232.41 b. $23,789.75 c. $19,565.40 d. $26,457.76 e. $22,233.41
You have $974,722 in a retirement account that pays a nominal annual interest rate of 9%, compounded quarterly. If you p...
You have $974,722 in a retirement account that pays a nominal annual interest rate of 9%, compounded quarterly. If you plan to take a quarterly distribution for the next 19 years, how much could you withdraw each quarter?
You have $783,278 in a retirement account that pays a nominal annual interest rate of 9%,...
You have $783,278 in a retirement account that pays a nominal annual interest rate of 9%, compounded quarterly. If you plan to take a quarterly distribution for the next 14 years, how much could you withdraw each quarter? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ("$"), any commas ("") or a decimal point (":").
3) Effective versus nominal interest rates. Bank A pays 4% interest compounded annually on deposits, Bank...
3) Effective versus nominal interest rates. Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and Bank C pays 3.5% compounded daily. a) Which bank would you use? Why? b) If you deposited $5,000 in each bank today, how much would you have at the end of 2 years? c) What nominal rate would cause Banks B and C to provide the same effective annual rate as Bank A? d) Suppose you do not...
3 pts $12,000 is deposited in a bank account that pays 8% nominal interest per year....
3 pts $12,000 is deposited in a bank account that pays 8% nominal interest per year. (a) How long does it take for the account to reach $42,500, if interest compounds quarterly? O 14 years O 16 yeans D Question 2 3 pts (b) What nominal annual interest would be required for the account to reach $30,000 in 10 years, if interest compounds monthly? 8.5%/year 92%/year
21) If a bank pays a 3.5% nominal annual rate, with monthly compounding, on deposits, what...
21) If a bank pays a 3.5% nominal annual rate, with monthly compounding, on deposits, what effective annual rate does the bank pay? a. 2.02% b. 2.53% c. 3.04% d. 3.56% e. 4.07%
Assume that you open a savings account that accrues 3% nominal annual interest that is compounded...
Assume that you open a savings account that accrues 3% nominal annual interest that is compounded monthly. Initially, your account has no funds in it. Starting next month, you add $100 / month for 6 months. Then, starting in the 7th month, you increase your monthly deposit by $25 each month from the month before for the following 18 months (i.e. month 7 deposit = $125). At the end of the second year, what will be the present worth of...
Bank A pays 8% interest, compounded quarterly, on its money market account. The managers of bank...
Bank A pays 8% interest, compounded quarterly, on its money market account. The managers of bank B want its money market account’s effective annual rate to equal that of Bank A, but Bank B will compound interest on a monthly basis. What nominal, or quoted, rate must bank B set?
You have $783,278 in a retirement account that pays a nominal annual interest rate of 9%, compounded quarterly. If you plan to take a quarterly distribution for the next 14 years, how much could you withdraw each quarter? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ("$"), any commas ("") or a decimal point (":").
3) Effective versus nominal interest rates. Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and Bank C pays 3.5% compounded daily. a) Which bank would you use? Why? b) If you deposited $5,000 in each bank today, how much would you have at the end of 2 years? c) What nominal rate would cause Banks B and C to provide the same effective annual rate as Bank A? d) Suppose you do not...
3 pts $12,000 is deposited in a bank account that pays 8% nominal interest per year. (a) How long does it take for the account to reach $42,500, if interest compounds quarterly? O 14 years O 16 yeans D Question 2 3 pts (b) What nominal annual interest would be required for the account to reach $30,000 in 10 years, if interest compounds monthly? 8.5%/year 92%/year
21) If a bank pays a 3.5% nominal annual rate, with monthly compounding, on deposits, what effective annual rate does the bank pay? a. 2.02% b. 2.53% c. 3.04% d. 3.56% e. 4.07%
Most questions answered within 3 hours.
-
The average length of time between arrivals at a turnpike
toll-booth is 26 seconds. What is...
asked 6 minutes ago -
(a) A piston at 6.1 atm contains a gas that occupies a volume of
3.5 L....
asked 1 hour ago -
Please answer true or false. Words
cannot be changed or added in to make it true...
asked 1 hour ago -
An empty test tube weighs 15.923 grams. Then,
MgCl2•6H2O is added into the test tube. After...
asked 1 hour ago -
Assume memory access is 10 units of time and disk access is
10000 units of time....
asked 1 hour ago -
1. Are all good samples random?
2. Magazines often report surveys giving statistics such as “63%...
asked 1 hour ago -
Under all the various types of market structures, firms
must eventually earn some economic profits for...
asked 1 hour ago -
Consider the following fitness regime for a single locus trait
with two co-dominant alleles: w11 =...
asked 1 hour ago -
A large cable company reports the following.
80% of its customers subscribe to its cable TV...
asked 2 hours ago -
Please answer the question in brief.
Discuss the role of ERP in organizations. Are ERP tools...
asked 1 hour ago -
Discuss the pros and cons of collaborative software such
as SameTime. Does it increase productivity? What...
asked 2 hours ago -
Buying your in-laws a gift because it’s expected is
due to the ____________ motive of gift-giving....
asked 2 hours ago