Bob plans to deposit a total of $12,000 each year for 9 years, either by quarter or by year. He has two choices.Option 1: he deposits $12,000 once per year at an annual rate of x% compounded annuallyOption 2: he deposits $3,000 each quarter at an annual rate of y% compounded quarterlyYou can assume that x is larger than y.Which option does he prefer?The option with the highest future valueOption 1 because the interest rate is higherOption 2 because his funds compound quarterlyWe cannot compare these options because one compounds quarterly and one annually

Answered: Image /qna-images/answer/7733ba63-a406-4ef0-aed8-715ffbcd83aa.jpg

Answered: Bob plans to deposit a total of $12,000…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose I have $1,000 in my account today. How much will I have in 5 years if I add $500 to my account each month (starting next month) if r = 12% APR compounded monthly?
1. a) A 20% compounded quarterly has an equivalent rate of 10.25%, how many times does it pay every year?Group of answer choices 3 4 2 1 b) How long in years will a certain sum of money to doubles its amount when deposited at a rate of 7% compounded bi-monthly?Group of answer choices8.96 yrs 10.96yrs 9.96 yrs 11.96yrs Answer both parts correctly. I ll rate
How much should I expect a lump sum from a deal at the end of 3 years if I start investing today at amount of 8,152 every 3 months with a ROR of 0.13 compounded quarterly?
A housewife bought a brand new washing machine costing Php 15,000 if paid in cash. However, she can purchase it on installment basis to be paid within 8 years. If money is worth 8.68 % compounded annually, what is her yearly amortization if all payments are to be made at the beginning of each year? Round your answer to 2 decimal places
A woman deposits $9000 at the end of each year for 10 years in an account paying 3% interest compounded annually. (a) Find the final amount she will have on deposit. (b) Her brother-in-law works in a bank that pays 2% compounded annually. If she deposits money in this bank instead of the other one, how much will she have in her account? (c) How much would she lose over 10 years by using her brother-in-law's bank?
If you need $25,000 in 14 years, how much will you need to deposit today if you can earn 10 percent per year compounded continuously? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Suppose P100, 000 is deposited in an account that earns 8% compound interest that is compounded semi-annually. In how many years will the initial investment triple? a.13.01 years b.14.01 years c.14 years d.13 years As advised by your financial adviser, you started to save P15,000 and deposited it every in the beginning of each month in a bank with 6% interest compounded annually, How much is the total amount after 8 years? (Hint: Future Value of General Annuity Due) a. 4,935,561.09 b. 3,495,561.09 c. 5,493,561.09 d. 9,435,561.09
An investment of P50,000 is made at the beginning of each month for 5 years. How much will the investment be at the end of the term, if interest is 7% compounded monthly? A.P3,505,944.00 B.P3,600,526.35 C.P3,649.020.00 D.P3,552.839.24
How much money would you have to deposit for five consecutive years starting one year from now if you want to be ablet o withdraw P50,000 ten years from now? Assume the interest is 14% compounded annually. Create the cashflow A. P5,298.60 C. P4,289.60 B. P3,928.60 D. P3,298.60
A man wants to make 14% nominal interest compounded semiannually on abond investment. How much should the man be willing to pay now for a 12%P10,000-bond that will mature in 20 years and pay interest semiannually?
Solve by using formulas. (Round your answer to the nearest cent.) Ordinary Annuity AnnuityPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Future Valueof the Annuity (in $) $3,000 every 6 months 5 5.0 semiannually $
You have an account that starts with $5,000. You add $500 to it each month. It earns 5.5% interest, compounded monthly. The investment will last for 34 years. Beyond the $500 you add each month, how much additional monthly payment will you need to add in order for the account to end with $1,100,000 after 34 years. Suppose you have an account that will grow to $394,000.00 in 20 years. It grows at 4.8% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $496,000.00 after 20 years. How much additional monthly contribution should they make to meet their goal?

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS