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- How much will be in a bank account at the end of five years if $2000 is invested today at 12 percent interest per annum, compounded yearly?find the present value of $175 perpetuity if the interest rate is 6 percent compounded quarterly. payments are at the beginning of the period.First City Bank pays 9 percent simple interest on its savings account balances, whereas Second City Bank pays 9 percent interest compounded annually If you made a deposit of $7,500 in each bank, how much more money would you earn from your Second City Bank account at the end of eight years?
- Which of the following has the highest future value? A. $100 saved for 2 years at 10 percent interest B. $130 saved for 2 years at 7 percent interest C. $120 saved for 2 years at 8 percent interest D. $110 saved for 2 years at 9 percent interestYou want to buy an ordinary annuity that will pay you $4,000 a year for the next 20 years. You expect annual interest rates will be 8 percent over that time period. The maximum price you would be willing to pay for the annuity is closest to:A bond with a face value of $7,000 pays quarterly interest of 2.5 percent each period. Twenty-two interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8 percent compounded quarterly on your money? table of compound interest factors for discrete compounding periods when i=2%.
- You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000 for 19 years after retirement. During the period before retirement you can earn 8 percent annually, while after retirement you can earn 10 percent on your money. What annual contributions to the retirement fund will allow you to receive the $17,000 annuity? Use Appendix C and Appendix D for an approximate.Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.How long will it take for an investment with an annual rate of return of 6% compounded annually to grow to ten times its current value? Answer neatly with proper explanation
- Suppose Kay inherits $250,000, which she invests today at a rate of return of 9 percent compounded annually. Who much will Kay's investment be worth in 25 years?You are saving up for a down payment on a house. You will deposit $600 a month for the next 24 months in a money market fund. How much will you have for your down payment in 24 months if the fund earns 12% APR compounded monthly?You are buying a home for $500,000. If you make a down payment of $80,000and take out a mortgage on the rest at 10% compounded monthly, what will be your monthly payment if the mortgage is to be paid off in 12 years?
