Tom has the opportunity to purchase an investment that will pa $30,000 in 5 years. The purchase price of the investment today is $18,000. Should he make the purchase if he can earn 10% on his investments? Explain your answer.
Q: How much money will be in a bank account at the end of 15 years if $100 is deposited today and the…
A: Compounding interest means the interest is calculated for the principal and after each period the…
Q: Interest earned with an annuity due is higher than that with an ordinary annuity. Do you agree or…
A: An annuity is a series of payments paid or received over a defined length of time. The timing of the…
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: Many years ago, Julie deposited $14,490 into a savings account. Today, the balance of the account is…
A: By using the formula;A=P1+r100n Where, A= Future value P= Present value r= Rate of interest n= Time…
Q: You are thinking of investing $3600 this year. You have received advice from family members. • Aunt…
A: Money is a commodity accepted by general consent as a medium of economic exchange. Here, we…
Q: Using 12 percent simple interest per year, how much interest will be owed on a loan of $500 at the…
A:
Q: Sherry has a goal of retiring with $393,180 by making weekly deposits into a investment account…
A: Given:- Amount=$393,180 Rate=1.6% Time=21 years To calculate:- Interest earn=? Please find the image…
Q: True or False: The time value of money describes how compound interest helps money grow over time. O…
A: Money is a resource or asset that is accepted and used as an exchange medium to buy commodities and…
Q: A man wishes to have $ 40,000 in a certain fund at the end of 8 years. How much should he invest in…
A:
Q: How much money do you need to deposit in a bank each month if you are planning to have $5000 in four…
A:
Q: carlos invests $6000 in a 24 month CD that has a 4.75 interest rate. use the formula to find how…
A: Certificate of Deposit (CD) The investors and the authorised banking and financial institution sign…
Q: How many years will it take an investment to triple if the interest rate is 8%compounded(a)…
A:
Q: When investing or saving money for retirement, which type of interest would benefit the most from?…
A: When investing or saving money for retirement which type of interest would benefit the most from?…
Q: A person deposits 2500$ today in the bank and he wants to get double of this amount, if the interest…
A: Simple interest formula : Interest = [Principal * Rate of interest * Number of years] / 100
Q: Which is the better investment, a fund that pays 5% compounded annually or one that pays 4.8%…
A: Discretely compounded interest is determined and added to the head at explicit spans (e.g., every…
Q: If you purchase $24,000 in U.S. Treasury Bills with a discount rate of 4.9% for a period of 26…
A: Interest for 26 week = Principal * Discount Rate * (26 / 52 ) = 24000 * 0.049 * 0.50 = 588
Q: Distinguish between Simple interest and Compound Interest?
A: Interest rate refers to the percentage of a principal amount charged by a lender to a borrower.
Q: Explain Methods of Calculating Interest?
A: Answer - Interest = It is the extra amount of money a lender which charge to a borrowers. there…
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: You plan to deposit $300 each year into an IRA earning 4% interest annually. How much will you have…
A: In enginnering economic, all the given information is denoted with specfiic symbols such as: Yearly…
Q: Liz plans to deposit $10,000 in the bank now and another $5,000 two years from now. If she plans to…
A: Deposit = 10,000 deposit after 2 years = 5,000 withdraw after 5 years = 8,000 interest rate = 10%
Q: What simple interest rate (in %) is equivalent to 5% compounded quarterly if money is invested for 9…
A: Answer to the question is as follows
Q: How long does it take an investment of P300,000 to double if it invested at 10% interest compounded…
A: The future value of a given amount invested is a function of interest rate, periods of investment,…
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: Frank purchased his house 16 years ago by taking out a 25-year mortgage for $150,000. The mortgage…
A: The term mortgage refers to a loan used to purchase or maintain a home, land, or other types of real…
Q: You are interested in buying a piece of real estate property that could be worth $450,000 in five…
A: Real Estate that could be worth $ 450,000 in 5 years. Earning Interest rate is 5%. So we are willing…
Q: How much money will be in a bank account at the end of 15 years if $100 is deposited to day and the…
A: From given information we have to calculate the amount that will be in bank account after 15 years…
Q: f you deposit $10000 into a fund paying interest 6%. How much you get after one yea
A: Given the deposit amount = $10000 Interest rate = 6%
Q: 3 You are considering investing $3,000 at an interest rate of 8% compounded ar ally for five years…
A: Compound Interest: Compound interest and simple interest are different, because in compound…
Q: How much will be in a bank account at the end of five years if $2000 is invested today at 12 percent…
A: Answer: Given, Principal = $2000 Interest rate per annum = 12% Number of years = 5 The following…
Q: What is meant by the present value of money? Choose the correct answer below. O A. The amount…
A: FV = PV1+inor PV = FV1+in where PV = present value FV = future value i =…
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: Explain what is Principal Plus Interest?
A: Principal plus interest is that amount which is paid by the borrower to the lender after the agreed…
Q: Rashed wants to make his investment triple its value at the end of twelve (12) years’ time. What…
A: We need to assume some terms such as interest rate , principle amount and then nee dto calculate the…
Q: If you had $1,000 now and invested it at 6%, how much would it be worth 12 years from now?
A: The following are the given data in the question: The current value of invested money = $1000…
Q: Assume that a 24-month CD purchased for $3000 pays an APY of 4.25% (and of course interest is…
A: I have assumed that it is compounded monthly. number of compounding periods: nlength of time: 2 (…
Q: Write the Summary of Compound-Interest Formulas?
A: Answer - Compound-Interest Formula - Compound interest formula helps to calculate the total return…
Q: What rate of interest (in %) compounded quarterly will yield an effective interest rate of 4.4%?…
A: Let x% be the rate of interest compounded quarterly Effective interest rate = 4.4% We have to find…
Q: accounts. How much will Mr. Jones have in his savings account in thirteen years if $50,000 is put in…
A:
Q: How many years would it take to take an investment of $28,000 to double 11% annual interest?
A: Present amount is 28000 and future amount is 2*28000 with rate of interest of 11%
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: Inez wants to have $13,500 in 5 years. Use the present value formula to calculate how much Inez…
A: Compound interest (or compounding interest) is the interest on a loan or deposit calculated based on…
Q: You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you…
A: Annual Payments refers to the (x) the total amount of payments anticipated to be paid or received,…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Fund A has a front-end load of 5.75%. You are considering an investment of $30,000. How much will you pay in commissions and how much will be invested for you after commissions? (You must show your calculations for credit).Amanda and Blake have found a house, which owing to a depressed real estate market costs only $201,500. They will put $22,000 down and finance the remainder with a 30-year mortgage loan at 3% interest (compounded monthly). (a) How much is their monthly loan payment? (b) How much interest will they pay in the second payment? (c) They will also have the following expenses: property taxes of $2100, homeowners’ insurance of $1625, and $290 mortgage insurance (in case one of them dies before the loan is repaid, a requirement of the bank). These annual amounts are paid in 12 installments and added to the loan payment. What is their full monthly cost? (d) If they can afford $1200 per month, can Amanda and Blake afford this house?You have 1 account: The balance owed is $405 and a $1500 credit limit. What is your debt-to-credit ratio? Enter your number as a percent and do not include the percent sign.
- You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per share in one year. What should you pay (rounded to the nearest dollar) for the stock today if you require an 6 percent return?On your 23rd birthday you decide to invest $4,500 (10% of your annual salary) in a mutual fund earning 7% per year. You will continue to make annual deposits equal to 10% of your annual salary until you retire at age 62 (40 years after you started your job). You expect your salary to increase by an average of 4% each year during this time. How much money will you have accumulated in your mutual fund when you retire?How much would you pay for a 4%, 10-year bond with a par (and redemption) value of $10,000 that pays a dividend semiannually if you wanted to earn an 8% return.
- A 12 percent semiannual coupon bond matures in 9 years. The bond has a face value of $1,000 and a current yield (CY) of 11.62 percent. What is the bond’s yield to maturity (YTM)? how would I calculate in a BA II PLUS FINANCIAL CALCULATOR. 4How can we use the capital recovery factor?A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $80 and is selling at face value. What will be the rate of return on the bond if its yield to maturity at the end of the year is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 1. 6% - 2. 8% - 3. 10% -
- Define the following: i) Simple interest. ii) Breakeven point. iii) Ordinary annuity. b) When the price of a commodity is Sh. 530 the unit demand is 55 units. The demand is 120 units when the price is Sh. 270. If the cost of production is C = 2q + 150, Calculate the profit when 5 units are produced and sold. c) The present value of an annuity due is Sh. 284,000 after 4 years at a discount rate of 10%. Calculate the annual payment. d) A man deposits Sh. 12,000 in a bank at the beginning of each year. The compound interest is 12% per year. Calculate how long it will take for an accumulated amount of Sh. 95,000.Consider a 25-year loan with an annual interest rate of 7 percent and monthly payments of $1,201.53. The discount points charged by the lender at origination are 3 percent and the cost of borrower title insurance and mortgage insurance are, respectively, 0.5 percent and 2.0 percent of the loan amount. Additional fees paid to other third parties (i.e., not the lender) will equal $4,000. What is the loan amount? What is the lender’s yield/IRR? What is the effective borrowing cost (EBC)? USE EXCELMr. Prudent has purchased a discount bond, that matures in 7 years with a payout of exactly $14,440. Assume that Mr. Prudent holds this bond for 3 years and then sells it in a secondary market. If the interest rate is 9.3%, then what price does he sell it for?
