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- 6. Alex invested a certain amount to a business and promised to pay him back with 1.8 times his original investment. They agreed to have it compounded monthly within 9 years. What is the nominal rate of interest r in percent?4. Eleanor makes year-end deposits of 500,000 the first year, 550,000 the second year, 605,000 thethird year, and so on increasing the next year’s deposit by 10% of the deposit in the preceding yearuntil the end of the 10th year. Ronald makes equal year-end deposits of 720,00,000 each year for 10years. A.) Is the gradient of Eleanor’s payments increasing or decreasing?B.) If interest on both funds is 12% compounded annually, who will be able to save more atthe end of 10 years.Alfred loaned a certain amount of money for his company. He promised the bank that he will payP 10,000 every end of the month for five months. How much did Alfred receive? Assume interestrate equals 2.5%
- 17. What is the effective annual interest rate if the nominal interest rate is 6%, compounded monthly?3. 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. (a) $196,010 (b) $188,196 (c) $190,162 (d) $199.279A6 6.Compute the nominal interest rate of a continuously compounded loan if the effective interest rate is 25%? ANSWER= 11.80%
- 3. If you deposit $1000 in an account that pays 5% interest, compounded annually, how much will you have at the end of 10 years? 50 years? 100 years? What if this is compounded Semi annually in 10 years? 50 years? 100 years?Determine the periodic deposit. Round up to the nearest dollar. How much of the financial goal comes from deposits and how much comes from interest?Periodic Deposit: $? at the end of each yearRate: 8% compounded annuallyTime: 12 yearsFinancial Goal: $20,000Let's say that you invest $8000 at 3.1 percent annual interest for 6 years. What will its value be? Carefully follow all numeric directions. Round intermediate steps to four decimal places and final answers to two.
- You want to take a dream vacation in 3.5 years. You plan to save up $5,000 in your vacation sinking fund. Assume an interest rate of 8% compounded annually. How much will you have to save if you make a lump sum deposit to the sinking fund (i) during the year or (ii) at the beginning of the year?1. An engineer plans to borrow $25,000 to open his own consulting business. He must repay $500 a month for 5 years. What is the nominal annual interest rate (compounded annually)? 2. An engineer is planning a 15 year retirement. She has decided that she will need to withdraw $4,000 each month from her bank account to live. How much money should she have in the bank at the start of her retirement, if the bank pays 0.25% interest per month (compounded monthly)? Hint: There are 15 x 12 compounding periods.1) A child’s grandparents have opened a ₱586702 savings account for the child on the day of her birth. The account pays 1.7% compounded semiannually. The child will be allowed to withdraw the money when she reaches the age of 21. What will the account be worth at that time? Round your answer to 2 decimal places. 2) What simple interest rate (in %) is equivalent to 6.5% compounded quarterly if money is invested for 8 years? Round your answer to 2 decimal places.
