Situation 4 Savings for postgraduate studies Andrea's parents, a high school student, decided to give their daughter $ 100,000 for her postgraduate studies that she will study abroad in 5 years, and they also plan to save an additional $ 2,000 each month during this same time, since they estimate that their studies and support will cost approximately $ 1,500,000. The banking institution offers you to invest the $ 100,000 and the monthly savings in a financial instrument that provides you with a fixed nominal interest rate of 5% per year, compounded monthly. The periodic interest rate is: [Value 1 point]
Select one: a. 1,040% b. 1,416% c. 0.416% d. 0.040%
PERIODIC INTEREST RATE = APR/ NO OF COMPOUNDING IN A YEAR
Periodic interest rate = 5%/12 = 0.416%
Answer : c : 0.416% [Thumbs up please]
Situation 4 Savings for postgraduate studies Andrea's parents, a high school student, decided to give their...
Andrea's parents, a high school student, decided to give their daughter $ 100,000 for her postgraduate studies that she will study abroad in 5 years, and they also plan to save an additional $ 2,000 each month during this same time, since they estimate that their studies and support will cost approximately $ 1,500,000. The banking institution offers you to invest the $ 100,000 and the monthly savings in a financial instrument that provides you with a fixed nominal interest...
You would like to start a business and have decided to move back into your parents’ basement as you save up the $50,000 you will need in starter costs. You procure a job that will allow you to contribute $550 into a savings account semi monthly (24 times a year). The account will be compounded at that same interval and will earn an annual interest rate of 3.259%. The instrument only allows you to collect at the end of complete...
1. Charleston Painless Surgery Center currently has $100,000 in excess cash. Meredith wants to invest the cash in a three-year bank certificate of deposit (CD) where, at maturity, the buyer receives the principal plus accumulated interest. a. What is the future value of the CD if it pays 2 percent interest compounded annually? 1 percent? 3 percent? (Hint: Use Excel’s “FV” function.) b. Big Bank offers a CD with 3 percent nominal (stated) interest that is compounded monthly. What is...