An investment promises to quadruple your money in eight years. If the interest is compounded monthly,...
An investment promises to quadruple your money in eight years. If the interest is compounded monthly, what effective annual rate would you earn? (Hint: Calculate the monthly rate and convert that to the effective annual rate, EAR.)
| A. |
25.99% |
|
| B. |
21.90% |
|
| C. |
18.92% |
|
| D. |
16.65% |
|
| E. |
41.42% |
|
| F. |
31.95% |
Homework Answers
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An investment promises to quadruple your money in eight years.
If the interest is compounded monthly,...
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...
find the accumulated value of an investment of 25,000 for 4 years at an interest rate of 5%, if the money is a compounded semiannually; b
find the accumulated value of an investment of 25,000 for 4 years at an interest rate of 5%, if the money is a compounded semiannually; b. coumpounded quaterly; c. compounded monthly d. coumpounded continuously.
Q:2 Sarah would like to make a single investment and have $2,000,000 at the time of...
Q:2 Sarah would like to make a single investment and have $2,000,000 at the time of her retirement in 35 years. She has found a mutual fund that will earn 4% annually. How much will Sarah have to invest today? If Annual Percentage Rate (APR) is 10%, calculate the effective Annual Rate (EAR) when interest rate is compounded i. Monthly ii. Continuously (4+4 = 8 marks)
If the annual interest rate is 5% that is compounded daily, monthly and yearly, what is...
If the annual interest rate is 5% that is compounded daily, monthly and yearly, what is the formula to calculate the effective interest after 3 years ?
3. Determine the value at the end of eight years of a $3,200 investment today that...
3. Determine the value at the end of eight years of a $3,200 investment today that pays a nominal annual interest rate of 18%, compounded: a) Annually b) Semiannually c) Quarterly d) Monthly
At 11 percent interest, how long would it take to quadruple your money? 13.09 years 6.64...
At 11 percent interest, how long would it take to quadruple your money? 13.09 years 6.64 years 13.28 years 13.56 years $7.94
3) Ravi invests $10,000 in an investment account that pays 4% compounded semi- annually. Ravi takes each interest p...
3) Ravi invests $10,000 in an investment account that pays 4% compounded semi- annually. Ravi takes each interest payment and invests it in a savings account that pays 1% compounded monthly. a) How much money does Ravi have at the end of 10 years? b) What is the effective annual rate he earned over 10 years?
3) Ravi invests $10,000 in an investment account that pays 4% compounded semi- annually. Ravi takes each interest p...
3) Ravi invests $10,000 in an investment account that pays 4% compounded semi- annually. Ravi takes each interest payment and invests it in a savings account that pays 1% compounded monthly. a) How much money does Ravi have at the end of 10 years? b) What is the effective annual rate he earned over 10 years?
A small business operator, Ms Smart, with limited investment opportunities deposits R10,000 into an investment account...
A small business operator, Ms Smart, with limited investment opportunities deposits R10,000 into an investment account paying 6% annual interest and leaves it on deposit for exactly 8 years. How much would be in the account at the end of 8 years if interest is compounded as follows i. monthly [4 marks] ii. semi-annually [4 marks] iii. Calculate the effective annual rate (EAR) for (i) and (ii) [6 marks] iv. Based on your findings in parts (i) to (iv), what...
Question 4: An Investment of $6300.00 earns interest at 11.96% p.a. compounded monthly for five years....
Question 4: An Investment of $6300.00 earns interest at 11.96% p.a. compounded monthly for five years. At that time the interest rate is changed to 7% compounded semi-annually. How much will the accumulated value be two and a half years after the change?
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...
Q:2 Sarah would like to make a single investment and have $2,000,000 at the time of her retirement in 35 years. She has found a mutual fund that will earn 4% annually. How much will Sarah have to invest today? If Annual Percentage Rate (APR) is 10%, calculate the effective Annual Rate (EAR) when interest rate is compounded i. Monthly ii. Continuously (4+4 = 8 marks)
3. Determine the value at the end of eight years of a $3,200 investment today that pays a nominal annual interest rate of 18%, compounded: a) Annually b) Semiannually c) Quarterly d) Monthly
3) Ravi invests $10,000 in an investment account that pays 4% compounded semi- annually. Ravi takes each interest payment and invests it in a savings account that pays 1% compounded monthly. a) How much money does Ravi have at the end of 10 years? b) What is the effective annual rate he earned over 10 years?
3) Ravi invests $10,000 in an investment account that pays 4% compounded semi- annually. Ravi takes each interest payment and invests it in a savings account that pays 1% compounded monthly. a) How much money does Ravi have at the end of 10 years? b) What is the effective annual rate he earned over 10 years?
Question 4: An Investment of $6300.00 earns interest at 11.96% p.a. compounded monthly for five years. At that time the interest rate is changed to 7% compounded semi-annually. How much will the accumulated value be two and a half years after the change?
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