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One safe investment pays 6% per year, and a more risky investment pays 8% per year....
6) Suppose you save money at a bank that pays 3% per year in simple interest....
6) Suppose you save money at a bank that pays 3% per year in simple interest. If you open the account with $1000, and in addition to the interest that the bank pays, on the last day of each year, you deposit $200 more into the account. Give a recurrence relation for S(n) your money at the end of n years, forn 20. How much money will you have at the end of 4 years?
1. A potential investment pays $10 per year indefinitely. The appropriate discount rate for the potential...
1. A potential investment pays $10 per year indefinitely. The appropriate discount rate for the potential investor is 10%. How is the present value of this cash flow calculated? 2. Suppose you have a choice of two equally risky annuities, each paying $1,000 per year for 20 years. One is an annuity due, while the other is an ordinary annuity. Which annuity would you choose? 3. Your college has agreed to give you a $10,000 tuition loan. As part of...
154. How much money must be invested in an account that pays 6% per year in-...
154. How much money must be invested in an account that pays 6% per year in- terest to be worth $20,000 at the end of 8 years if (forgetting leap years and making "convenient" assumptions): a. Interest is compounded annually? onomani a b. Interest is compounded semi-annually? c. Interest is compounded quarterly? Wo b d. Interest is compounded monthly? no wo o e. Interest is compounded weekly? f. Interest is compounded daily? g. Interest is compounded hourly? h. Interest is...
There are two accounts. The first pays 10% per year simple interest and the second pays...
There are two accounts. The first pays 10% per year simple interest and the second pays 5% per year interest compounded quarterly. Initially, the first account pays more interest but at some point in time the second account will pay more annual interest. How long before the second account earns more annual interest?
(1 point) A man invests his savings in two accounts, one paying 6% and the other...
(1 point) A man invests his savings in two accounts, one paying 6% and the other paying 10% simple interest per year. He puts twice as much in the lower- yielding account because it is less risky. His annual interest is $7568 dollars. How much did he invest at each rate? Your answer is: Amount invested at 6% equals $ Amount invested at 10% equals $
4 Given a choice of two investments, would you choose one that pays a total return...
4
Given a choice of two investments, would you choose one that pays a total return of 30 percent over five years or one that pays 0.5 percent per month for five years? What annual rate of return does each give you? Instructions: Enter your responses in percentages to the nearest hundredth, for example, 3.00 for 3 percent. The return of 30 percent over 5 years provides an annual return of percent. The return of 0.5 percent per month for...
Your grandmother invested $2,300 for you on the day you were born. This investment has earned...
Your grandmother invested $2,300 for you on the day you were born. This investment has earned an average of 13.8 percent annually. How old are you if the investment is now worth $18,642? O 14.36 years 14.58 years 15.15 years 16.19 years You just inherited $7100 which you are investing at 7.25 percent interest. How long will you have to wait un your account reaches a value of $12,000 O 6.96 years O 8.34 years O 7.50 years O 8.55...
Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days...
Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days in a year. 11% compounded monthly: 11.25% compounded annually %. The effective annual yield for a 11% compounded monthly investment is (Round to two decimal places as needed.) Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days in a year. 3% compounded semiannually; 2.9% compounded daily %. The effective annual yield for a 3% compounded semiannually investment...
1. What's the present value of a perpetuity that pays $200,500 per year if the appropriate...
1. What's the present value of a perpetuity that pays $200,500 per year if the appropriate interest rate is 5%? 2. Mr. Nieto has $3,431,712 and wants to retire. He expects to live for another 15 years and to earn 5.0% on his invested funds. How much could he withdraw at the end of each of the next 15 years and end up with $500,000 in the account? 3. Nicholas of Derme has $200,000 invested in a Bitcoin bank that...
2. Aji Fatou rents a house for which she pays the landlord $25,000 per year. The...
2. Aji Fatou rents a house for which she pays the landlord $25,000 per year. The house can be purchased for $250,000 and Aji Fatou has this much money in her savings account that pays 6% interest per year. Aji Fatou is considering to buy the house. Is buying the house a good deal for Aji Fatou? (Hint: Consider Aji Fatou’s opportunity cost of buying the house and financial tradeoff: her lost interest vs. her gained rent). 3. A Midwestern...
6) Suppose you save money at a bank that pays 3% per year in simple interest. If you open the account with $1000, and in addition to the interest that the bank pays, on the last day of each year, you deposit $200 more into the account. Give a recurrence relation for S(n) your money at the end of n years, forn 20. How much money will you have at the end of 4 years?
1. A potential investment pays $10 per year indefinitely. The appropriate discount rate for the potential investor is 10%. How is the present value of this cash flow calculated? 2. Suppose you have a choice of two equally risky annuities, each paying $1,000 per year for 20 years. One is an annuity due, while the other is an ordinary annuity. Which annuity would you choose? 3. Your college has agreed to give you a $10,000 tuition loan. As part of...
154. How much money must be invested in an account that pays 6% per year in- terest to be worth $20,000 at the end of 8 years if (forgetting leap years and making "convenient" assumptions): a. Interest is compounded annually? onomani a b. Interest is compounded semi-annually? c. Interest is compounded quarterly? Wo b d. Interest is compounded monthly? no wo o e. Interest is compounded weekly? f. Interest is compounded daily? g. Interest is compounded hourly? h. Interest is...
There are two accounts. The first pays 10% per year simple interest and the second pays 5% per year interest compounded quarterly. Initially, the first account pays more interest but at some point in time the second account will pay more annual interest. How long before the second account earns more annual interest?
(1 point) A man invests his savings in two accounts, one paying 6% and the other paying 10% simple interest per year. He puts twice as much in the lower- yielding account because it is less risky. His annual interest is $7568 dollars. How much did he invest at each rate? Your answer is: Amount invested at 6% equals $ Amount invested at 10% equals $
4
Given a choice of two investments, would you choose one that pays a total return of 30 percent over five years or one that pays 0.5 percent per month for five years? What annual rate of return does each give you? Instructions: Enter your responses in percentages to the nearest hundredth, for example, 3.00 for 3 percent. The return of 30 percent over 5 years provides an annual return of percent. The return of 0.5 percent per month for...
Your grandmother invested $2,300 for you on the day you were born. This investment has earned an average of 13.8 percent annually. How old are you if the investment is now worth $18,642? O 14.36 years 14.58 years 15.15 years 16.19 years You just inherited $7100 which you are investing at 7.25 percent interest. How long will you have to wait un your account reaches a value of $12,000 O 6.96 years O 8.34 years O 7.50 years O 8.55...
Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days in a year. 11% compounded monthly: 11.25% compounded annually %. The effective annual yield for a 11% compounded monthly investment is (Round to two decimal places as needed.) Determine the effective annual yield for each investment. Then select the better investment. Assume 360 days in a year. 3% compounded semiannually; 2.9% compounded daily %. The effective annual yield for a 3% compounded semiannually investment...
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