To receive $1,400 at the end of every six months for 12 years from a $15,500...

Question

Question

To receive $1,400 at the end of every six months for 12 years from a $15,500 investment, what nominal rate of interest, compo

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Amount Invested = $15,500
Semiannual Payment = $1,400
Semiannual Period = 24 (12 years)

Let semiannual interest rate be i%

$15,500 = $1,400 * PVA of $1 (i%, 24)

Using financial calculator:
N = 24
PV = -15500
PMT = 1400
FV = 0

I = 7.406%

Semiannual Interest Rate = 7.406%

Annual Interest Rate = 2 * Semiannual Interest Rate
Annual Interest Rate = 2 * 7.406%
Annual Interest Rate = 14.812% or 14.81%

Add a comment

Answer 2

Similar Homework Help Questions

Jean receives annuity payments at the end of every six months. If she deposits these payments...

Jean receives annuity payments at the end of every six months. If she deposits these payments in an account earning interest at 9% compounded monthly, what is the equivalent semi-annually compounded rate of interest? What sum of money must be deposited at the end of every 3 months into an account paying 6% compounded monthly to accumulate to $25,000 in 10 years? Irina deposited $150 in a savings account at the end of each month for 60 months. If the...
Deposits of $96.00 are made at the end of every six months for 9.5 years. What...

Deposits of $96.00 are made at the end of every six months for 9.5 years. What will the deposits amount to if interest is 9% compounded semi-annually? The future value is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Adrian deposited $1,400 at the end of every month into an RRSP for 8 years. The...

Adrian deposited $1,400 at the end of every month into an RRSP for 8 years. The interest rate earned was 4.50% compounded semi-annually for the first 3 years and changed to 4.75% compounded monthly for the next 5 years. What was the accumulated value of the RRSP at the end of 8 years?

Michelle invested $1,550 at the end of every 6 months into an RRSP for 16 years....

Michelle invested $1,550 at the end of every 6 months into an RRSP for 16 years. For the first 8 years she earned interest at a rate of 4.80% compounded semi-annualy and for the next 8 years she earned interest at a rate of 6.40% compounded semi-annualy. a. Calculate the accumulated value of her investment after the first 8 years. $0.00 Round to the nearest cent b. Calculate the accumulated value of her investment at the end of 16 years....
1) You receive $5,000 at the end of every year for three years. What is the...

1) You receive $5,000 at the end of every year for three years. What is the present value of these receipts if you earn eight percent compounded annually 2)What amount will be accumulated in four years if $10,000 is invested today at six percent interest compounded annually?
For the last 5 years Kerwin has made deposits of $126.00 at the end of every...

For the last 5 years Kerwin has made deposits of $126.00 at the end of every six months earning interest at 6 % compounded semi-annually. If he leaves the accumulated balance for another 4 years at 10 % compounded annually , what will the balance be in the account?The balance will be $---------nothing. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Starting six months after her grandson Robin's birth, Mrs. Devine made deposits of $240 into a...

Starting six months after her grandson Robin's birth, Mrs. Devine made deposits of $240 into a trust fund every six months until Robin was twenty-one years old. The trust fund provides for equal withdrawals at the end of each six months for four years, beginning six months after the last deposit. If interest is 5.87% compounded semi-annually, how much will Robin receive every six months? Robin will receive $___ ? (Round the final answer to the nearest cent as needed....
Ruby will receive 12 payments of $X every six months, beginning six months from today. If...

Ruby will receive 12 payments of $X every six months, beginning six months from today. If the present value of all 12 payments is $3670, find the payment amount $X, given an effective annual interest rate of 9%. Select one: a. $490 O b. $400 c. $275 OOO o d. $325 e. $530 O Today, Sohla made a $1200 investment, which will pay 15% annual interest. How much MORE money will she have after seven years, if she earns compound...
1 a) b) You invested $9,500 at the end of each half-year for 5 years in...

1 a) b) You invested $9,500 at the end of each half-year for 5 years in an investment fund. At the end of year 5, if the balance in the fund was $111,000, what was the nominal interest rate compounded semi-annually? 0.00% Round to two decimal places Quarter-end payments of $1,430 are made to settle a loan of $36,280 in years. What is the effective interest rate? 0.00 % Round to two decimal places

Catherine purchases a retirement annuity that will pay her $2,500 at the end of every six months for the first ten years and $600 at the end of every month for the next six years. The annuity earns interest at a rate of 2.8% compounded quarterly.

Catherine purchases a retirement annuity that will pay her $2,500 at the end of every six months for the first ten years and $600 at the end of every month for the next six years. The annuity earns interest at a rate of 2.8% compounded quarterly.a). What was the purchase price of the annuity?b). How much interest did Catherine receive from the annuity?

To receive $1,400 at the end of every six months for 12 years from a $15,500...

Homework Answers

Add Answer to:
To receive $1,400 at the end of every six months for 12 years from a $15,500...

Post as a guest

Earn Coins

Jean receives annuity payments at the end of every six months. If she deposits these payments...

Deposits of $96.00 are made at the end of every six months for 9.5 years. What...

Adrian deposited $1,400 at the end of every month into an RRSP for 8 years. The...

Michelle invested $1,550 at the end of every 6 months into an RRSP for 16 years....

1) You receive $5,000 at the end of every year for three years. What is the...

For the last 5 years Kerwin has made deposits of $126.00 at the end of every...

Starting six months after her grandson Robin's birth, Mrs. Devine made deposits of $240 into a...

Ruby will receive 12 payments of $X every six months, beginning six months from today. If...

1 a) b) You invested $9,500 at the end of each half-year for 5 years in...

Catherine purchases a retirement annuity that will pay her $2,500 at the end of every six months for the first ten years and $600 at the end of every month for the next six years. The annuity earns interest at a rate of 2.8% compounded quarterly.

To receive $1,400 at the end of every six months for 12 years from a $15,500...

Homework Answers

Add Answer to: To receive $1,400 at the end of every six months for 12 years from a $15,500...

Post as a guest

Earn Coins

Add Answer to:
To receive $1,400 at the end of every six months for 12 years from a $15,500...