If inflation is measured at 3% per annum and a savings account is paying interest at 3% per annum, the purchasing power of the savings made will remain unchanged. True or false? Why?
The answer is true.
Since the savings interest rate and inflation rate is same, the real interest rate is 0%. Hence purchasing power remains unchanged.
If inflation is measured at 3% per annum and a savings account is paying interest at...
Assume you opened and deposited $1000.00 into a savings account that pays 4% per annum. If the bank compounds interest annually, how much will you have in your account at the end of 3 years (assuming no deposits or withdrawals are made for 3 years)? Find the balance if the bank compounds interest quarterly under the same conditions. Find the balance if the bank compounds interest continuously under the same conditions.
Melinda has a daily savings account that earns interest at 3.1% per annum. She opened her account with $2000 on March 31. How much interest will she earn during the first two years if the interest is calculated daily and paid into the account at the end of each month? (Enter the value only; do NOT add a $ sign.)
1. Calculate the real interest rate per annum using the full Fisher equation if the nominal interest rate is 6% per annum and the inflation rate is 2% per annum. A. 3.92% B. 4.00% C. 8.00% D. 8.12% 5. Calculate the simple interest rate per to a nominal interest rate of 4% compounded monthly over a 24 period. A. 3.33% B. 4.00% C. 4.16% D. 6.67% 6. Michael made a deposit of $13,000 exactly 5 years ago into an account...
Suppose that $17,000 is invested in a savings account paying 6.2% interest per year. (a) Write the formula for the amount A in the account after years of interest is compounded monthly Att) - (b) Find the amount in the account after 5 years ir interest is compounded daily (Round your answer to two decimal places) (c) How long will it take for the amount in the account to grow to $20,000 ir interest is compounded continuously? (Round your answer...
"You have $13,200 in a savings account that has been paying 6.3% interest, compounded week . you made one de o t when you o years ago and made no other deposits after that, how much did you initially deposit in the account? Assume 52 weeks per year." ene the account exact
2.A bond offers a real rate of interest of 2.0% per annum. If expected inflation is 3.0% per annum, the nominal rate of interest per annum, according to the exact Fisher equation, is (in percentage to nearest two decimal places; do not use the percentage sign eg 2.881% is 2.8
Question 4 (8 pts): Suppose that you deposit $12,000 in a savings account that earns 7% in annually. Inflation is 2.5%. a) What is the real interest rate? (2 pts) 5) How much money is in your account at the end of the year? (In nominal amount) (3 pt - What is the real purchasing power of that amount? (In real amount) (3 pts)
Andrew and Emma Garfield invested $6,600 in a savings account paying 6% annual interest when their daughter, Angela, was born. They also deposited $1,000 on each of her birthdays until she was 18 (including her 18th birthday). Sandhill Co. issued $900,000, 9-year bonds and agreed to make annual sinking fund deposits of $76,800. The deposits are made at the end of each year into an account paying 8% annual interest.
1. Suppose that an account earns 4.8% interest per annum. How much would need to be deposited now in order to have $10000 in 5 years if there interest is compounded (a) Monthly; (b) Continuously? Give answers to the nearest dollar. 2. If an investment of $20000 is made in an account returning 3.2% then how long will it take for the account to have $24000 if (a) Interest is compounded quarterly? (four times a year) (b) Interest is compounded...
Determine the amount you must deposit today in your SUPER savings account, paying 10% interest, in order to accumlate $7,500 for a down payment 3 years from now on a new car.