(1 point) David opens a bank account with an initial balance of 1500 dollars. Let b(t) be the balance in the account at time t. Thus b(0) = 1500, The bank is paying interest at a continuous rate of 6% per year, David makes deposits into the account at a continuous rate of s(t) dollars per year. Suppose that s (0) 1 100 and that s (t) is increasing at a continuous rate of 5% per year (David can save...
D vi 11/16/17 (1) An investor deposits $35,000 into an IRA for her retirement in 25 years. The account pays 3.5% interest compounded continuously. She also plans to deposit $1800 each year into the account in a near-continuous manner for the same amount of time. What will be the value of her account after 25 years if she stays true to this plan?
Finally, let's consider an investment in which payments are made for some time, then payments discontinue and the investment is earning interest on the total amount. Example 7: Shelly is 47 years old. At the end of each month, she deposits $340 into a retirement account that pays 5.47% interest, compounded monthly. a) After 10 years, what is the value of the account? b) If no further deposits or withdrawals are made of the account, what is the value of...
(1 point) John opens a bank account with an initial balance of 500 dollars. Let b(t be the balance in the account at time t. Thus b(0) 500. The bank is paying interest at a continuous rate of 4% per year. John makes deposits into the account at a continuous rate of s(t) dollars per year. Suppose that s(0) = 500 and that s(t) is increasing at a continuous rate of 2% per year (John can as his income goes...
(1 point) John opens a bank account with an initial balance of 500 dollars. Let bt be the balance in the account at time t. Thus b(0)= 500. The bank is paying interest at a continuous rate of 4% per year. John makes deposits into the account at a continuous rate of s(t) dollars per year. Suppose that s(0) 500 and that s(t) is increasing at a continuous rate of 2% per year (John can save more as his income...
10. Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security of $10,000 will be worth $14,693 five years in the future, assuming that no additional deposits or withdrawals are made, what is the Implied interest rate the investor will earn on the security? O 4.80% O 6.00% O 6.40% O...
Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days in a year. 11% compounded monthly: 11.25% compounded annually %. The effective annual yield for a 11% compounded monthly investment is (Round to two decimal places as needed.) Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days in a year. 3% compounded semiannually; 2.9% compounded daily %. The effective annual yield for a 3% compounded semiannually investment...
A continuous annuity is a steady stream of money that is paid out, for example, by making an initial deposit in an account and then making steady withdrawals to pay the annuity. Suppose that an initial deposit of $3600 is made into an account that earns 6% interest compounded continuously, and immediately continuous withdrawals are begun at the rate of $200 per year. a.) Set up the differential equation that is satisfied by the amount f(t) of money in the...
Exercise A3-20 (Algorithmic) Future Values of an Annuity Use Future Value Tables or your calculator to complete the requirements below. On December 31, 2020, you sign a contract to make annual deposits of $5,200 in an investment account that earns 10%. The first deposit is made on December 31, 2020. Required: 1. Calculate what the balance in this investment account will be just after the seventh deposit has been made if interest is compounded annually. Round your answer to the...
Attempts: Average be number of years 4. Finding the interes Aa The future value and pre correspond to present and quations also help in finding the interest rate and the number of years that value calculations. If a security currently worth $12,800 will be worth $18,807.40 five years in the future, what is the implied interest rate the investor will earn on the setsrity-assuming that no additional deposits or withdrawals are made? O O 8.00% 0.29% 1.47% 6.40% If an...