If Ms. Whosier receives $16,000 in 4 years’ time, invests it in a bank account for 6 years at 6% per year, then 5 years at 3% per year, then 2 years at 4%, what sum will she have at the end of this 17 year period?
Ms. Whosier receives money in 4 years time, so actual investment is for 17-4 = 13 years only.
It is an illustration of future value of single sum with different rates with different time period.
the formula is :
FV = PV * (1+r1)^n1 * (1+r2)^n2* (1+r3)^n3
FV = 16000 *( 1+0.06)^6 * (1+0.03)^5 * (1+0.04)^2
FV = 16000 * 1.418519 * 1.159274 * 1.0816 = 28458.23
Answer : 28458.23 (Thumbs up please)
If Ms. Whosier receives $16,000 in 4 years’ time, invests it in a bank account for...
4) Nandana invests $500 at the start of each year for 20 years in a bank account paying interest at the effective annual rate i. She takes the interest paid at the end of each year and invests it in a different account paying an effective annual rate i/2. The effective annual rate she earns on her combined investments is 6% a) How much money does she have at the end of 20 years? (Total of both accounts.) b) What...
Nandana invests $500 at the start of each year for 20 years in a bank account paying interest at the effective annual rate i. She takes the interest paid at the end of each year and invests it in a different account paying an effective annual rate i/2. The effective annual rate she earns on her combined investments is 6%. a) How much money does she have at the end of 20 years? (Total of both accounts.) b) What is...
Jessica wants to accumulate $10,000 by the end of 6 years in a special bank account, which she had opened for this purpose. To achieve this goal, Jessica plans to deposit a fixed sum of money into the account at the end of the month over the 6-year period. If the bank pays interest at the rate of 6% per year compounded monthly, how much does she have to deposit each month into her account? (Round your answer to the...
1. Meagan invests $1,200 each year in an IRA for 12 years in an account that earned 5% compounded annually. At the end of 12 years, she stopped making payments to the account, but continued to invest her accumulated amount at 5% compounded annually for the next 11 years. a. [3 pts] What was the value of the IRA at the end of 12 years? b. [2 pt] What was the value of the investment at the end of the...
1. Meagan invests $1,200 each year in an IRA for 12 years in an account that earned 5% compounded annually. At the end of 12 years, she stopped making payments to the account, but continued to invest her accumulated amount at 5% compounded annually for the next 11 years. a. [3 pts] What was the value of the IRA at the end of 12 years? Formula 1 Work* 1.5 I Answef 0.5 b. [2 pts] What was the value of...
1) Menke Auto Ltd invests $2.5 million at 25% for 3 years. Calculate the FV of this investment. (2.5 Marks) 2) Butcher's Ltd invests $2.5 million at 24% for 3 months. Calculate the FV of this investment. (2.5 Marks) 3) An insurance policy will pay $380,000 in 7 years' time. Assume the interest rate is 20%. Calculate the present value of such in lump sum payment. (5 Marks) 4) Karen was offered an annuity that would pay her $1000 per...
Suzanne invests $20,000 in an account that pays 7% annual compound interest for 3 years. She wants to know how much money she will have at the end of each year. Please draw a timeline and show how much money Suzanne will have accumulated at the end of each calendar year (Years 1-3)
4. If your goal is to have $10,000 in a bank account in 12 years at an interest rate of 6%, how much money must you invest per year? a. What type of problem is this: lump sum or annuity? b. Fill in each of the following (Note: one of the answers is unknown – write ?): PV = FV = CF = t = r = c. Draw a time line d. Write the appropriate formula. e. Solve the...
Professor G invests $4,000 into an account that guarantees 4.2% interest (compounded annually) for 6 years. How much will he have after the 6 year time period?
2. Donny invests $100 at the end of each year for 5 years into an account paying simple interest of i% per year. The value of his investment at the end of the 5th year is $591. Calculatei 3. Given an amount function A(t)-212 +31+4·12 0, t in years, find the following: (a) The effective rate of interest in year 2 (b) The effective rate of discount in the 4th year (c) The corresponding accumulation function. (d) In the amount...