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1. Calculate the future worth of 20 annual $4,000 deposits in a savings account that earns 8% compounded monthly. Assume all deposits are made at the beginning of each year.

1. Calculate the future worth of 20 annual $4,000 deposits in a savings account that earns 8% compounded monthly. Assume all deposits are made at the beginning of each year.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.21MCE
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please answer all. do not use excel please, show all solution.

1. Calculate the future worth of 20 annual $4,000 deposits in a savings account that earns 8% compounded monthly. Assume all deposits are made at the beginning of each year.

2. Two banks offer the following interest rates on your deposit: (1) Bank A : 9% interest compounded quarterly (2) Bank B: 8.5% interest compounded continuously. Which of the following statements is not true?

(a) The annual percentage yield (APY) for Bank A is 9.30%.
(b) The effective annual interest rate for Bank B is 8.87%.
(c) Bank A offers a better deal.
(d) The annual percentage rate (APR) for Bank 8 is 8.5%.

 

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