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
deposit (CD) that carried a...
3. Two years ago, you invested $5,000 in a four-year certificate of deposit (CD). The annual...
3. Two years ago, you invested $5,000 in a four-year certificate of deposit (CD). The annual (stated) rate is 4% on the CD and it is compounded quarterly. Rates have increased and you are considering reinvesting in another certificate of deposit. However, if you withdraw the money from the original CD, you suffer a 10% penalty on the entire balance (interest and principal): a. If you make the withdrawal today, how much would you have remaining? (8 Points)
Future value (with changing years). Dixie Bank offers a certificate of deposit with an option to...
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...
Dixie Bank offers a certificate of deposit with an option to select your own investment period....
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1. Allen Paige is planning to invest $10,000 in a bank certificate of deposit (CD) for...
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Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank...
Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one-year maturity and a fixed interest rate. The first certificate of deposit, CD #1, pays 5.95 percent APR compounded quarterly, while the second certificate of deposit, CD #2, pays 6.00 percent APR compounded annually. What is the effective annual rate (the EAR) of each CD, and which CD do you recommend to your grandmother? If the first certificate of deposit, CD #1,...
A certificate of deposit (CD) is similar to a savings account, but deposits are generally held...
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Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank...
Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one-year maturity and a fixed interest rate. The first certificate of deposit, CD #1, pays 5.95 percent APR compounded quarterly, while the second certificate of deposit, CD #2, pays 6.00 percent APR compounded weekly. ****What is the effective annual rate (the EAR) of each CD, If the first certificate of deposit, CD #1, pays 5.95 percent APR compounded , the EAR for...
A certificate of deposit (CD) often charges a penalty for withdrawing funds before the maturity date....
A certificate of deposit (CD) often charges a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the charge for early withdrawal on a $15000 CD with a 1.5% interest rate APR, compounded monthly? You just purchased a high-grade corporate bond with a face value of $1000. The coupon rate is 2%. How much to you expect to be paid in coupon payments over the next year?
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...
You’ve decided to set aside $5,000 in a commercial bank certificate of deposit (CD). Assuming your money will earn interest at a rate of 3%, how much will your entire account be worth at the end of the first year? Group of answer choices $15,000 $5,150 $150 $1,666
3. Two years ago, you invested $5,000 in a four-year certificate of deposit (CD). The annual (stated) rate is 4% on the CD and it is compounded quarterly. Rates have increased and you are considering reinvesting in another certificate of deposit. However, if you withdraw the money from the original CD, you suffer a 10% penalty on the entire balance (interest and principal): a. If you make the withdrawal today, how much would you have remaining? (8 Points)
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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