Interest rate. Upstate Bank is offering long-term certificates of deposit with a face value of $100,...
Interest rate. Upstate Bank is offering long-term certificates of deposit with a face value of $100, 000 (future value). Bank customers can buy these CDs today for $40,000 and will receive the $100,000 in 15 years. What interest rate is the bank paying on these CDs?
Homework Answers
We see that interest rate is given as equal to=(Future
Value/Present
Value)^(1/t)-1=(100000/40000)^(1/15)-1=6.30%
Add Answer to:
Interest rate. Upstate Bank is offering long-term certificates
of deposit with a face value of $100,...
Interest rate. Upstate Bank is offering long-term certificates of deposit with a face value of $100,000...
Interest rate. Upstate Bank is offering long-term certificates of deposit with a face value of $100,000 (future value). Bank customers can buy these CDs today for $60,000 and will receive the $100,000 in 25 years. What interest rate is the bank paying on these CDs?
Question 6 Upstate Bank is offering long-term certificates of deposit with a face value of $3510...
Question 6 Upstate Bank is offering long-term certificates of deposit with a face value of $3510 (future value). Bank will customers can buy these certificates of deposit today for $67,000 and receive the $100,000 in fifteen vears. What interest rate is the bank paying on these certificates of deposit? Solution Formula Solve Here
A bank offers the following certificates of deposit: Terms in years Annual nominal interest rate, compounded...
A bank offers the following certificates of deposit: Terms in years Annual nominal interest rate, compounded semi-annually 1 5% 2 6% 3 7% 4 8% The bank requires that interest accumulate at the certificate’s interest rate, and does not permit early withdrawal. The certificates mature at the end of the term. During the next six years, the bank will continue to offer these certificates of deposit. Jeff invests 1000 in the bank. Calculate the maximum amount...
37. You can earn 8 percent interest, compounded monthly. How much must you deposit today to...
37. You can earn 8 percent interest, compounded monthly. How much must you deposit today to withdraw $10,000 in 6 years? 38. If you invest $10,000 in an account expected to earn 5.0% compounded annually, how long do you need to invest for the account to have grown to $40,000? 42. A bank is offering a CD which it will sell to its customers for $10,000 paying them back $14,000 in 4 years. What annual rate of return will a...
Your bank offers 3-year certificates of deposit with a stated rate of interest of 11.82 %...
Your bank offers 3-year certificates of deposit with a stated rate of interest of 11.82 % p.a., compounded quarterly. Your cousin (who works at Acme Bank and Trust, a competitor) wants to know what stated rate of interest you would require from them in order to switch your business to their bank. Acme's CD's are compounded on a monthly basis. What is the minimum stated interest rate you should ask for from Acme in order to make you indifferent to...
Certificates of Deposit and Effective Annual Yield Your money earns interest at a higher rate when...
Certificates of Deposit and Effective Annual Yield Your money earns interest at a higher rate when you buy a certificate of deposit than it does when you invest it in a regular savings account. Most certificates eam interest compounded daily. The annual yield is the rate at which your money earns simple interest in one year. INTEREST EARNED - AMOUNT - ORIGINAL PRINCIPAL INTEREST FOR ONE YEAR PRINCIPAL ANNUAL YIELD - Use the table below to answer the problems. AMOUNT...
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...
Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 per...
Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 percent and the inflation rate is 5 percent, you will be able to buy ________ worth of inflation-adjusted goods on January 1, 2018. a. $110 b. $95 c. $100 d. $105 e. $90 Practically, in the long run the real interest rate is equal to: a. a savings account. b. the marginal product of capital. c. the rate of return to...
Future value. Grand Opening Bank is offering a one-time investment opportunity for its new customers. A...
Future value. Grand Opening Bank is offering a one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for $200 today, which the bank will compound at 6.5% for the next ten years. The savings bond must be held for at least five years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each cash-in...
4. Finding the interest rate and the number of years The future value and present value...
4. Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $16, 124.31 three years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? 8.00% 6.40% 7.94% 1.26% for this...
Question 6 Upstate Bank is offering long-term certificates of deposit with a face value of $3510 (future value). Bank will customers can buy these certificates of deposit today for $67,000 and receive the $100,000 in fifteen vears. What interest rate is the bank paying on these certificates of deposit? Solution Formula Solve Here
Your bank offers 3-year certificates of deposit with a stated rate of interest of 11.82 % p.a., compounded quarterly. Your cousin (who works at Acme Bank and Trust, a competitor) wants to know what stated rate of interest you would require from them in order to switch your business to their bank. Acme's CD's are compounded on a monthly basis. What is the minimum stated interest rate you should ask for from Acme in order to make you indifferent to...
Certificates of Deposit and Effective Annual Yield Your money earns interest at a higher rate when you buy a certificate of deposit than it does when you invest it in a regular savings account. Most certificates eam interest compounded daily. The annual yield is the rate at which your money earns simple interest in one year. INTEREST EARNED - AMOUNT - ORIGINAL PRINCIPAL INTEREST FOR ONE YEAR PRINCIPAL ANNUAL YIELD - Use the table below to answer the problems. AMOUNT...
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...
Future value. Grand Opening Bank is offering a one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for $200 today, which the bank will compound at 6.5% for the next ten years. The savings bond must be held for at least five years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each cash-in...
4. Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $16, 124.31 three years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? 8.00% 6.40% 7.94% 1.26% for this...
Most questions answered within 3 hours.
-
1. What is the present value of $400, three years in the future
if the interest...
asked 30 minutes ago -
The labor force minus the number of employed equals the number
of unemployed.
a. True
b....
asked 2 hours ago -
Determine the mass in units of grams [g] of 0.49 moles [mol]
of a new fictitious...
asked 2 hours ago -
A horizontal mass of M=5kg is on a spring and stretched to
x=0.5m when released from...
asked 4 hours ago -
26 of 50
"I have worked at the Arizona Humane Society for ten years, and
have...
asked 4 hours ago -
Compare and contrast zero based budgeting and incremental (or
base year) budgeting.
asked 4 hours ago -
4 pts 10. Which of the following hypothesis would be MOST
difficult to test experimentally? Group...
asked 4 hours ago -
A business owner makes 1,000 items a day. Each day he or she
contributes eight hours...
asked 4 hours ago -
A
circular loop in the plane of a paper lies inca0.65 T magnetic
field pointing into...
asked 4 hours ago -
A business owner is trying to decide whether to buy, rent, or
lease office space and...
asked 4 hours ago -
Thermal Storage Solar heating of a house is much more efficient
if there is a way...
asked 5 hours ago -
Considering the “fits” for group and job design dimensions,
suppose you had 12 employees with different...
asked 5 hours ago