Your bank is offering you an account that will pay interest in total for a two-year deposit. Determine the equivalent discount rate for a period length of:
a. Six months.
b. One year.
c. One month.
Your bank is offering you an account that will pay 16% interest in total for a two-year deposit. Determine the equivalent discount rate for a period length of: a. Six months. b. One year. c. One month.
Your bank is offering you an account that will pay 15% interest (an effective two-year rate) in total for a two-year deposit. Determine the equivalent discount rate for the following periods: a. Six months b. One year c. One month (Note: Be careful not to round any intermediate steps less than six decimal places.) a. Six months The equivalent discount rate for a period length of six months is %. (Round to two decimal places.)
1. Your bank is offering you an account that will pay 22% interest (an effective two-year rate) in total for a two-year deposit. Determine the equivalent discount rate for the following periods: a. Six months b. One year c. One month (Note: Be careful not to round any intermediate steps less than six decimal places.)
You deposit $3,000 at the end of the year (k = 0) into an account that pays interest at a rate of 7% compounded annually. A year after your deposit, the savings account interest rate changes to 1 2% nominal interest compounded month y Five years after ur de o the savings account aga changes it interest rate this time e interest rate becomes 8% nominal interest compounded quarterly. Eight years after your deposit, the saving account changes its rate...
1. A bank purchases a six-month $2 million Eurodollar deposit at an interest rate of 7.4 percent per year. It invests the funds in a six- month Swedish krona bond paying 8.0 percent per year. The current spot rate of U.S. dollars for Swedish krona is $0.1790/SKr. a. The six-month forward rate on the Swedish Krona is being quoted at $0.1810/SKr. What is the net spread earned for six months on this investment if the bank covers its foreign exchange...
A bank purchases a six-month $1 million Eurodollar deposit at an interest rate of 7.5 percent per year. It invests the funds in a six-month Swedish krona bond paying 8.4 percent per year. The current spot rate of U.S. dollars for Swedish krona is $0.1800/SKr. a. The six-month forward rate on the Swedish krona is being quoted at $0.1810/SKr. What is the net spread earned for six months on this investment if the bank covers its foreign exchange exposure using...
You deposit $2,500 at the end of the year ( 0) into an account that pays interest at a rate of 7% compounded annually. Two years after your deposit, the savings account interest rate changes to 12% nominal interest compounded monthly. Five years after your deposit, the savings account again changes its interest rate this time the interest rate becomes 8% nominal interest compounded quarterly Nine years after your deposit, the saving account changes its rate once more to 6%...
Please explain how they got 2.25% Suppose you are trying to save money for a vacation in two years. Bank A is offering savings account with annual interest rate 2%. You are pretty sure interest rates will go up and next year savings account will pay 2.5%. Bank B is offering a two-year time deposit (CD). That is, if you deposit money now you can't withdraw for 2 years. How much annual interest on time-deposit accounts should Bank B offer...
Assume you just deposited $1,000 into a bank account. The interest rate on your deposit is 6% and inflation is expected to be 2% over the next year. What is the real interest rate you expect to earn on your deposit over the next year? How much money will you have on deposit at the end of one year? If you are saving to buy a new smartphone that currently sells for $1,050, will you have enough money to buy...
4) interest questions: (10 pts total) How much will be in your bank account at the end of five years if you invest $5,000 now at 12% per annum, compounded annually? (1 pts) And what if the interest rate is 12% per annum, but compounded monthly? (1 pts) If you invest your $5,000 and want to have $10,000 in five years' time, what is the minimum yearly interest rate that will ensure that you have at least this much when...
Module 4 Hand- in Assignment a. 1. You deposit $1000 into a bank account that pays 10% simple. How much interest would you earn if: You left the money in for 6 years. b. You left the money in for 9 months. c. Your deposit was on April 6 and you withdrew the money on December 23 the same year d. You made a deposit October 28, and withdrew the money September 21, the next year. 2. 18 months ago...