After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
8. Karen has $16,000 that she wants to invest for 1 year. She can invest this amount at The North Bank and earn 5.50 percent simple interest. Or, she can open an account at The South Bank and earn 5.39 percent interest, compounded monthly. If Karen decides to invest at The North Bank, she will:
What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?
academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,
d. If you can earn 9% per year, how much will you have to save each year if you want to retire in 40 years with $3 million?
9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if
FVN = FV1= PV × (1 +I)N = $500 x (1 + 0.08) = $500 x 1.08 = $540
10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?
A $20,000, 90-day, 8% note payable was issued on November 1, 2015. Using a 360-day year, what is the amount of accrued interest on December 31, 2015?
1. If Mrs. Beach wanted to invest a lump sum of money today to have $100,000 when she retired at 65 (she is 40 years old today) how much of a deposit would she have to make if the interest rate on the C.D. was 5%?
12. Today, you deposit $10,750 in a bank account that pays 3 percent simple interest. How much interest will you earn over the next 7 years?
A person deposited $500 in a savings account that pays 5% annual interest that is compounded yearly. At the end of 10 years, how much money will be in the savings account? (Bluman, A. G. 2005, page 230).
1. What must be invested today, to be worth $20,000 in 10 years, if it is compounded yearly at 8%?
The semi-annual compounded interest rate is 5.2% (a six-month discount rate of 5.2/2 = 2.6%). (15 points)