Mountain Grains Cooperative wants to invest $42,000 in a short-term deposit. The bank offers 1.4% interest for a one-year term and 1.3% for a six-month term. (a) How much would Mountain Grainsreceive if the $42,000 is invested for one year?
Mountain Grains Cooperative wants to invest $42,000 in a short-term deposit. The bank offers 1.4% interest for a one-year term and 1.3% for a six-month term. (a) How much would Mountain Grainsreceive if the $42,000 is invested for one year?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 10P: The D.J. Masson Corporation needs to raise $500,000 for 1 year to supply working capital to a new...
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Mountain Grains Cooperative wants to invest $42,000 in a short-term deposit. The bank offers 1.4% interest for a one-year term and 1.3% for a six-month term.
(a) How much would Mountain Grainsreceive if the $42,000 is invested for one year?
(b) How much would Mountain Grains receive at the end of one year if the
$42,000 is invested for six months and then the principal and interest earned is reinvested for another six months?
(c) What would the one-year rate have to be to yield the same amount of interest as the investment described in part (b)?
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