Homework Answers
Daily compounding will give the highest interest because in compounding you get interest on interest amount.
the higher the frequency of compounding, higher the interest rate.
Therefore, at daily compounding interest rate will be maximum.
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You have deposited your savings into an investment account each month. You are hoping to earn...
Show the excel formulas used Ex. 1 You have $5,000 in your savings account that pays...
Show the excel formulas used
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years and you can earn...
On January 1, 2016, you deposited $6,600 in a savings account. The account will earn 10...
On January 1, 2016, you deposited $6,600 in a savings account. The account will earn 10 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 4 years? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answers...
On January 1, 2018, you deposited $5,700 in a savings account. The account will earn 10...
On January 1, 2018, you deposited $5,700 in a savings account. The account will earn 10 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 5 years? 2. What is the total interest for the 5 years? 3. How much interest revenue did the fund earn in 2018 and in 2019? Complete this question by entering...
On January 1, 2016, you deposited $5,700 in a savings account. The account will earn 9...
On January 1, 2016, you deposited $5,700 in a savings account. The account will earn 9 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 3 years? (Future Value of $1. Present Value of $1. Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answers...
Show the excel formulas used and answer all questions Ex. 1 You have $5,000 in your...
Show the excel formulas used and answer all questions
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years...
On January 1, 2016, you deposited $7,000 in a savings account. The account will earn 9...
On January 1, 2016, you deposited $7,000 in a savings account. The account will earn 9 percent annual compound interest, which will be added to the fund balance at the end of each year. 1. What will be the balance in the savings account at the end of 9 years? (Use appropriate factor(s) from the tables provided. Round your final answers to 2 decimal places.) Balance in the savings account> 2. What is the total interest for the 9 years? (Use...
1) If $4000 is deposited in a savings account that earns interest at an annual rate...
1) If $4000 is deposited in a savings account that earns interest at an annual rate of 2.5% interest compounded continuously, what is the value of the account at the end of two years? 2) A trust fund for a 11-year-old child is being set up by a single payment so that at age 21 the child will receive $37,000. Find how much the payment is if an interest rate of 9% compounded semiannually is assumed. 3) A bank account...
Suppose you deposited $5,000 in a savings account. If you have $5,500 in the account after...
Suppose you deposited $5,000 in a savings account. If you have $5,500 in the account after 2 years, what annual interest rate did you earn on your savings? Answer in percentage terms rounded to two decimal places. (e.g., if the correct answer is 0.0563 in decimals, convert to % by multiplying by 100 and enter 5.63. Don't include the % sign.) [Hint: Use Equation 2.6]
Alice has $225,000 in savings in an investment account. She is able to earn an APR...
Alice has $225,000 in savings in an investment account. She is able to earn an APR of 4.5% in her investment account (which has monthly compounding). Ignore tax. She decided to buy a house of take out a 30-year mortgage. The mortgage will have an APR of 4.5% with monthly compounding and monthly payments. The bank requires at least a 20% house value down payment. She decides to buy the largest possible house given her savings. What is her monthly...
Matt recently deposited $27,500 in a savings account paying a guaranteed interest rate of 5.2% for...
Matt recently deposited $27,500 in a savings account paying a guaranteed interest rate of 5.2% for the next 10 years if Matt expects his marginal rate tax to be 22% for the next 10 years how much interest will he earn after-tax for the first year of his investment? how much interest will I earn after-tax for the second year of his investment if he withdraws enough cash every year to pay the tax on the interest he earns? How...
Show the excel formulas used
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years and you can earn...
On January 1, 2018, you deposited $5,700 in a savings account. The account will earn 10 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 5 years? 2. What is the total interest for the 5 years? 3. How much interest revenue did the fund earn in 2018 and in 2019? Complete this question by entering...
On January 1, 2016, you deposited $5,700 in a savings account. The account will earn 9 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 3 years? (Future Value of $1. Present Value of $1. Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answers...
Show the excel formulas used and answer all questions
Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years...
Suppose you deposited $5,000 in a savings account. If you have $5,500 in the account after 2 years, what annual interest rate did you earn on your savings? Answer in percentage terms rounded to two decimal places. (e.g., if the correct answer is 0.0563 in decimals, convert to % by multiplying by 100 and enter 5.63. Don't include the % sign.) [Hint: Use Equation 2.6]
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