Eight years ago Plato Spaghetti paid $250 for a certificate of deposit (CD) that carried a...
Eight years ago Plato Spaghetti paid $250 for a certificate of deposit (CD) that carried a 7% annual interest rate. Today at maturity the CD is worth how much?
Homework Answers
Current value = Purchase price(1 + Interest rate)^Time
Current value = $250(1 + 0.07)^8
Current value = $429.55
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Eight years ago Plato Spaghetti paid $250 for a certificate of
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Dixie Bank offers a certificate of deposit with an option to select your own investment period....
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A certificate of deposit (CD) often charges a penalty for withdrawing funds before the maturity date....
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Appendix A You invest $3,000 in a certificate of deposit that matures after eight years and...
Appendix A
You invest $3,000 in a certificate of deposit that matures after
eight years and pays 5 percent interest, which is compounded
annually until the certificate matures. Use Appendix A to answer
the questions. Round your answers to the nearest dollar.
How much interest will you earn if the interest is left to
accumulate?
$
How much interest will you earn if the interest is withdrawn
each year?
$
You’ve decided to set aside $5,000 in a commercial bank certificate of deposit (CD). Assuming your...
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Future value (with changing years). Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $7,500 for his CD investment. If the bank is offering a 4.5% interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a a. two-year investment period? b. six-year investment period? c. ten-year investment period? d. fifteen-year investment period? a. How much will the $7,500 CD investment at 4.5% interest rate...
A certificate of deposit (CD) is similar to a savings account, but deposits are generally held to maturity. They usually offer higher rates than savings accounts because they "tie up" money for a period of time and often require a minimum deposit. A 4-year CD at a certain bank has a nominal rate of 2.379%, and an effective annual yield of 2.400%. If $800,000 is deposited with this bank, how much will be in the account at the end of...
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