How much money do you need to deposit in a bank each month if you are planning to have $5000 in four years by the time you get out of college? The bank offers a 6.75% interest rate that compounds monthly.
Q: Find the present value (in dollars) of an annuity that pays $7,000 at the end of each 6-month period…
A:
Q: Explain the true effect of more frequent compounding on annual interest amounts?
A: With more frequent compounding, the returns are higher. With the increase in compounding periods,…
Q: What is the amount of interest earned on $2,000 for five years at 10% simple interest per year?
A: here we calculate the interest earned by simple interest so the calculation as follow-
Q: How much do you need to save each year for 30 years in order to have $775,000, assuming you are…
A:
Q: Compared the interest earned by $13,000 for seven years at 8% simple interest with interest earned…
A: Given: Principal amount ( P) = $13,000 Interest rate(r) = 8% Time(t) = 7 years
Q: How much money will be in your account three years after the previous deposit? If you make six…
A: Total number of years = 6 years Annual deposits = $6000 Interest rate = 15% Half yearly deposits =…
Q: You were entitled to receive $5,000 at the end of six months for the rest of your life. If the…
A: Given: The future value is = $5,000 Years = At the end of 6 months The rate of interest is = 10%…
Q: Interest can be computed more frequently than one time a year Select one: O True O False
A: Interest is the price of money that is borrowed.
Q: Sam promises to pay Sandy $2,000 in four years and another $3,000 four years later for a loan of…
A: Interest rate: The real interest rate is the rate of interest that is being calculated in an economy…
Q: A lottery claims its grand prize is $20 million, payable over four years at $4,000,000 per year. If…
A: We know that, PV = FV / (1+r)n So, PV of all cash flow of this lottery is, PV = $4,000,000 /…
Q: You have borrowed $28,000 at an interest rate of 12% compounded annually. Equal payments will be…
A: According to question, given that Borrowing amount $28,000@12%/year a) AP represented annual…
Q: Nicholas made a deposit of $5,000 in a savings account that earns 2% per year. What is the maximum…
A: here we calculate the given by following method as follow;
Q: David is planning to contribute $8,000 a year into a mutual fund that earns an average of 8% per…
A: In economics, present value refers to the current value of future steam of cash flow. Future value…
Q: If P15,000 is invested in a bank today with a simple interest rate of 9% annually, how much will it…
A: Here, given information is: Money invested today (P): P15,000 Annual interest rate (r): 9% Time…
Q: If you borrow $3,000 at 6% simple interest per year for seven years, how much will you have to repay…
A: Answers Q1. Option (b) is correct Here we need to use the simple interest formula as below:…
Q: For a nominal interest rate of 6%, what is the effective interest rate if interest is (a.)…
A: The effective rate of interest is the return on a savings account or an investment, whose interest…
Q: How much should be deposited in an account that will earn at an annual rate of 9%, compounded…
A: The interest charged on a loan or deposit is known as compound interest. This is the most often…
Q: The CEO of a company is to give each nominal interest of his 50 employees a bonus. How much is…
A: The total holiday bonus is (50)($1000) = $50,000 Use the uniform series sinking funds discount…
Q: Greg wants to have $50 000 in five years. He has $20 000 today to invest. The bank is offering…
A: Interest rate per quarter (i) can be calculated as follows. ...
Q: Determine the current yield on a bond with a $200 annual interest repayment as well as a $1,550…
A: Bonds are a type of debt instrument that stand in for loans given to the issuer. Bonds are a…
Q: How many years will it take an investment to triple if the interest rate is 8%compounded(a)…
A:
Q: What are the annual payments necessary to pay a $100,000, 12-year loan if the loan rate is 8 %
A: The loan rate is defined as the rate of interest at which the loan is paid to the bank. It means the…
Q: How much should you invest in a 3.8% saving account compounded monthly in order to have a total of…
A: Given: Interest rate=3.8% Future value=P 68185 Number of years=7
Q: A man borrowed P280,000 and agrees to pay the loan at the end of each month for 48 months at 1.5%…
A: Given Borrowed amount P=280,000 Interest rate =1.5% compounded monthly. Time (n) = 48 months
Q: How much should you pay for a $1,000 bond with 10% coupon, annual payments, and 5 years to maturity…
A: The interest rate is the amount a lender charges a borrower and is a percentage of the principal the…
Q: How much loan will be extinguished for a monthly amortization of ₱4,500 at 12% interest compounded…
A: Formula to be used: Compound interest (PN)=PO1+rKNKPN=Balance after n yearsN=YearsPO=Principal…
Q: How much do ten ₱ 5,811 quarterly payments amount at present, if the interest rate is 2 compounded…
A: Given the quarterly payment = 5811 Interest rate = 2%/4 = 0.5% Number of compounding period = 10
Q: At 8% annual interest compounded monthly, how long will it take to become a millionaire if you…
A: The annual interest rate is 8%, compounded monthly The amount invested is $150,000 We have to find…
Q: What uniform annual payment for 12 years is equivalent to receiving all of the following: $ 3,000 at…
A: In the question, the following are the values given: Each year payment = $3000 Number of years = 12…
Q: Find the interest on the loan if Tim borrows $10,000 for years at a simple interest of 10%.
A: The investors as well as consumers borrow or take loans funds from banks for investment or for…
Q: If you had BD 4,500 now and invested at 13% interest compounded annually, how much would it be worth…
A: Investment Amount = 4500 r = 13% n = 8
Q: Does the compounding increases the amount of interest paid over a year atthe same nominal interest…
A: The interest rate is the income earned by the investment in the economy. When the money is invested…
Q: If P25,000 is invested at 8% interest compounded quarterly, how many years will it take for this…
A: Quarterly nominal interest rate = 8% / 4 = 2% Let number of quarters be N. Then 25,000 x (1.02)N =…
Q: Determine the principal that would have to be invested to provide $200 of simple interest income at…
A: Simple Interest refers to the money that is paid only on principal, or the money which is invested…
Q: Suppose you want to have $600,000 for retirement in 25 years. Your account earns 10% interest. How…
A: Given: Amount at retirement=$600,000Time=25 yearsRate of interest=0.10
Q: You take out a loan of $12,000 to pay for a piece of equipment. You plan to repay the loan in 16…
A: Suppose you want to pay the first installment at the end of the year. So 16 equal payments of $1100…
Q: Suppose you make equal quarterly deposit of $ 1,000 into a fund that pays interest rate of 12%…
A: Quarterly deposit = 1000 Interest = 12% Balance at the end of 3 years = ?
Q: Lia wishes to have $3000 after 3 years in an account that draws 6% nominal interest compounded…
A: In this question we have to find out the principal value with the help of the above information.
Q: Suppose you deposit $35,000 in an account today that pays 3.78% interest, compounded annually. How…
A: The compound interest adds the interest acquired on a time period to the principal amount and the…
Q: How much money would you pay in interest if you borrowed $18,000 for one year at simple 20% per…
A: P = 18,000 r = 0.2 t = 1 Therefore, A = P(1 + rt) A = 18000 [1 + (0.2 x 1)] A = 18000 [1 + 0.2] A =…
Q: In both of the simple and compound interest cases a higher rate means the borrower pays more. true…
A: When an individual borrows money from another individual or financial institutions, he has to pay…
Q: At 8% annual interest compounded quarterly, how long will it take to become a millionaire if you…
A: Interest is the amount received in excess of the investment to an investor. The two methods of…
Q: What should be the price of perpetuity that pays P5.000 every month with an interest rate of 8%…
A: Given payment each month = 5000 Interest rate = 8 % compounded annually Total payment each year =…
Q: You obtain a loan 1.5 at the rate of 18% compounded annually in order to build a house. The payment…
A: Given: Loan (P)=1.5 Rate (r)=18% compounded annually
Q: A trust will pay you $50,000 per year for 30 years starting 1 year from now. Assuming an interest…
A: Cash flow is the movement of money in and out of a company. Cash received signifies inflows, and…
Q: You have borrowed $20,000 at an interest rate at 10% compounded annually. Equal payments will be…
A: Part-1Annual Instalment is computed by dividing the loan amount with annuity PVF for 3 years at…
How much money do you need to deposit in a bank each month if you are planning to have $5000 in four years by the time you get out of college? The bank offers a 6.75% interest rate that compounds monthly.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- You take out a loan of $12,000 to pay for a piece of equipment. You plan to repay the loan in 16 years. You can afford to pay a maximum of $1,100 each year. What interest rate would allow for you to pay off the entirely of the loan in equal payments?how much did you deposit at the end of each month in an IRA that pays 7% compounded monthly to earn $70,000 per year from interest alone, while leaving the principal untouched, to be withdrawn at the end of each year after you retire in 30 years?Steve promises to pay Amanda $2,000 in four years and another $3,000 four years later for a loan of $2,000 from Sandy today. What is the interest rate that Sandy is getting? Assume interest is compounded monthly.
- If you borrowed $32,000 for 72 months at 16.5% with an add-on loan, what would be your monthly payment and the total amount you paid on interestDetermine the principal that would have to be invested to provide $200 of simple interest income at the end of two years if the annual interest rate is 9% ?Sam promises to pay Sandy $2,000 in four years and another $3,000 four years later for a loan of $2,000 from Sandy today. What is the interest rate that Sandy is getting? Assume interest is compounded monthly.
- You have borrowed $50,000 at an interest rate of 12%. Equal payments will be made over a three-year period. (The first payment will be made at the end of the first year.) What will the annual payment be, and what will the interest payment be for the second year?Explain the true effect of more frequent compounding on annual interest amounts?Does the compounding increases the amount of interest paid over a year atthe same nominal interest rate?
- Calculate the current yield on a bond that has an annual interest payment of $200 and a resale price of $1,550Economics If an interest rate is 18% per year, compounded quarterly, what is the effective quarterly interest rate? 3.8% 4.5% 4.8% 6.2% 8.6% Explain meIf you want to buy a car in two years that cost $20,000.00, how much should put away every month if you can get a six percent nominal annual interest rate-compounded monthly?