6. You won a bet for $600 and decide to put your winnings into a 2-year CD that pays 4%/year with interest paid quarterly. a. Draw a timeline from your perspective. b. How much will you have at the end of 2 years?
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- You won a bet for $700 and decide to put the money into a 3-year CD with a rate of 4%/year with interest paid semi-annually. Draw a timeline from your perspective. How much will you have at the end of 3 years?3) If you are willing to loan someone $100 and expect to be paid back $200 and earn 12% on your investment, approximately when would you need to be paid back? A) 4 years B) 5 years C) 6 years D) 7 years E) 8 yearsSolve each of the following questions using both pricing formulas and Excel. 3. You plan to retire in 35 years. At the end of each year, you plan on saving $15,000, and your bank pays you 2% annual interest. How much will you have saved by the time you retire?
- You make a one-time investment of $500 and leave it for 5 years, earning an annual interest rate of 4%. How much interest will you have earned after 5 years? If you leave the entire amount in your account for another 5 years and earn the same interest rate, how much interest will you earn over the second 5-year period?Suppose, you have won a lottery prize You have two payment options: A: Receive $20,000 now B: Receive $5,800 a year paid for four years and interest rate is 8%.You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?3. You wish to purchase a land worth P750,000 and the seller requires 20% downpayment. Then you will loan the balance from a bank that charge 6% annual interest rate to be paid for 1 year. a. How much is the monthly amortization? b. How much is the total interest?You plan to invest $2,000 per year into a retirement account. If you earn a compound annual rate of return of 5%, how many years will it take you to reach a balance of $500,000?