I receive my tax return of $5000 and deposit it in an interest bearing account at...
- I receive my tax return of $5000 and deposit it in an interest bearing account at the bank. It receives 7% interest compounding quarterly. What is the amount of interest that you earned after 10 years?
- What is the future value of $10,000,000 at 5% interest compounded quarterly over 20 years?
- What is the future value of $250,000 at 7.5% interest compounded semi-annually over 15 years?
Homework Answers
| EAR = [(1 +stated rate/no. of compounding periods) ^no. of compounding periods - 1]* 100 |
| ? = ((1+7/(4*100))^4-1)*100 |
| Effective Annual Rate% = 7.1859 |
| Future value = present value*(1+ rate)^time |
| Future value = 5000*(1+0.071859)^10 |
| Future value = 10007.98 |
interest = FV-PV = 10007.98-5000 = 5007.98
| Please ask remaining parts seperately, questions are unrelated |
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