Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays 5% interest compounded daily? Explain.

### Want to see the full answer?

Check out a sample Q&A here*arrow_forward*Check out a sample Q&A here

*star_border*

## Related Finance Q&A

Find answers to questions asked by students like you.

Q:Â You have $2,000 on a credit card that charges a 21% interest rate. If you want to pay off the creditâ€¦

A:Â Monthly payment is a fixed periodic payment which is made by a borrower to the lender.

Q:Â suppose that you would like to save $20,000 over 5 years to use as a down payment for a house byâ€¦

A:Â Computation of monthly deposit:Hence, the monthly deposit into the account is $301.66 per month.

Q:Â If you deposit money today in an account that pays 5% annual interest, how long will it take toâ€¦

A:Â Interest rate (r) = 5% Future value factor required (FVF) = 3 Period = n

Q:Â Suppose you want to have $2,000,000 in 45 years. Calculate how much you need to deposit per nonth inâ€¦

A:Â The present value is the value of the sum received at time 0. It is the current value of the sumâ€¦

Q:Â How much should you invest into an account with 3.2% interest compounded quarterly if you want toâ€¦

A:Â Given that;Payment amount is $1000 Interest rate is 3.2%, as it is compounded quarterly, the rate weâ€¦

Q:Â Today, you borrowed $3,200 on a credit card that charges an interest rate of 12.9 percent,â€¦

A:Â We use NPER function to calculate monthly payments (in financial calculator and excel)

Q:Â Suppose that you make quarterly deposits into a savings account that earns 8% interest compoundedâ€¦

A:Â Effective Annual Rate is a modified rate of return where it considers the compounding effect.â€¦

Q:Â If you deposit money today in an account that pays 4% annual interest, how long will it take toâ€¦

A:Â Assume , you invest $100 double the money invested = $100 * 2 = $200

Q:Â If you deposit $5,000 in a bank account that pays 6% interest annually, how much will be in yourâ€¦

A:Â We need to use the concept of time value of money to solve the question. According to the concept ofâ€¦

*question_answer*

Q:Â Suppose you deposit $1000 into a savings account earns 2% and is compounded semiannually. If youâ€¦

A:Â Future value is the compounded value of a sum of money invested for a period of time at a specifiedâ€¦

*question_answer*

Q:Â How much would you need to deposit in an account right now in order to have $2,000 in the account inâ€¦

A:Â Amount = $2,000 = A Time period = 10 years = TÂ Interest rate = 2% = R Compounded monthly where itâ€¦

*question_answer*

Q:Â Suppose you want to have $300,000 in the bank when you retire in 45 years and the bank pays 3%â€¦

A:Â given, rate = 3% no of years= 45 FV= 300,000

*question_answer*

Q:Â 1. If you deposit money today in an account that pays 6.5% annual interest, how long will it take toâ€¦

A:Â Future value is the value of cash in future at a particular date.Let us assume if person X hasâ€¦

*question_answer*

Q:Â uppose you want to have $800,000 for retirement in 30 years. Your account earns 9% interest. Howâ€¦

A:Â The monthly deposit is also called the annuity in which the equal amount has been paid until theâ€¦

*question_answer*

Q:Â You want to deposit your savings for a year and you have the choice of three accounts. The firstâ€¦

A:Â Effective annual rate is the interest actually earned on the investment or paid on the loan, as aâ€¦

*question_answer*

Q:Â If you deposit $8,000 in a bank account that pays 4% interest annually, how much will be in yourâ€¦

A:Â Deposit=$8000InterestÂ rate=4%NumberÂ ofÂ years=5

*question_answer*

Q:Â You want to be able to withdraw $1,000 from a savings account at the end of year 1, with withdrawalsâ€¦

A:Â The present value of a growing annuity is the current value of an annuity which is growing at aâ€¦

*question_answer*

Q:Â You have a bank deposit now worth $5000. How long will it take for your deposit to be worth moreâ€¦

A:Â Interest is an additional amount which is earned on deposited amount for the period. It increasesâ€¦

*question_answer*

Q:Â How much do you have to invest today in a savings account that returns 6.5% interest, compundedâ€¦

A:Â Amount after 10 years = $25,300 Amount Invested =Let P Years =10 Interest Rate(r) =6.5% compoundedâ€¦

*question_answer*

Q:Â If you borrow $24398 with an annual rate of 9% compounded monthly and make a payment of $282 everyâ€¦

A:Â Here we will use the concept of time value of money. As per the concept of time value of money theâ€¦

*question_answer*

Q:Â How much would you need to deposit in an account now in order to have $6000 in the account in 5â€¦

A:Â The question gives the following information:

*question_answer*

Q:Â You deposit $5,000 in a savings account that earns 6% simple interest per year.How many years willâ€¦

A:Â We can use excel spreadsheet to solve this problem.

*question_answer*

Q:Â ou have monthly interest rate of 1.65% and a balance on your credit card of 2000.00. If you paid theâ€¦

A:Â To determine the interest amount and percentage that goes towards reducing principle.Â The amount ofâ€¦

*question_answer*

Q:Â If you deposit $3,500 monthly into a savings account which earns 4.25% interest rate compoundedâ€¦

A:Â The future value function or concept can be used to determine the future value of a present sum orâ€¦

*question_answer*

Q:Â Suppose you found a CD that pays 2.9% interest compounded monthly for 5 years. If you depositâ€¦

A:Â 1) FV = PV * (1 + r / m)m*n FV = future value PV = present value = $12,000 r = rate of interest =â€¦

*question_answer*

Q:Â You will need $46000 for a down payment on a house in 9 years. How much should you deposit in aâ€¦

A:Â Present value refers to theÂ current worth of the amount that is expected to be received in futureâ€¦

*question_answer*

Q:Â Suppose you put $250 at the beginning of every month in a savings account that credits interest atâ€¦

A:Â Monthly deposit is $250. Annual rate of interest is 6%. Time period is 25 years. Compoundingâ€¦

*question_answer*

Q:Â You want to be able to withdraw $50,000 each year for 15 years. Your account earns 7% interest. a)â€¦

A:Â Here, Annual Withdrawals (PMT) is $50,000 Time Duration is 15 years Interest Rate is 7%

*question_answer*

Q:Â You deposit $500 each month into an account earning 3% interest compounded monthly. Round to theâ€¦

A:Â We need to use future value of annuity formula to calculate money in account after 25 years Futureâ€¦

*question_answer*

Q:Â Suppose you deposit $10 every week into an account that earns 4% interest compounded weekly.Â Howâ€¦

A:Â The future value is the amount that will be received at the end of a certain period. In simpleâ€¦

*question_answer*

Q:Â Which is better for the depositor: an account that yields 15% compounded monthly or 12% compoundedâ€¦

A:Â Option-1 - 15% Compounding monthly Option-2 - 12% Compounding annually

*question_answer*

Q:Â A bank is currently offering a savings account paying an interest rate of 6.0 percent compoundedâ€¦

A:Â Equivalent annual rate:Â It is an annual rate of interest whether compounded monthly, quarterly, orâ€¦

*question_answer*

Q:Â If you want to have $60,000 in 8 years, how much do you need to deposit in the bank today if theâ€¦

A:Â Here. Required Amount in 8 YearsÂ (FV) is$60,000 Interest Rate (r) is 9% Time Period is 8 years

*question_answer*

Q:Â You put \$1,000$1,000 into a savings account today that offers a 5\%5% APR with semi-annualâ€¦

A:Â Banks usually offer loans to customers, and they also accept deposits from the customers. Theâ€¦

*question_answer*

Q:Â Suppose you deposit $20,000 in an account today that pays 4% interest, compounded annually. How longâ€¦

A:Â Here, 20,000 is deposited today and future value is $80,000. Want to calculate how many years itâ€¦

*question_answer*

Q:Â If you deposit money today in an account that pays 6.5% annual interest, how long will it take toâ€¦

A:Â Rule 72 refers to the rule which makes it a simple calculation for the person to determine that inâ€¦

*question_answer*

Q:Â You are considering getting a new credit card from Imperial Credit Union. The credit union hasâ€¦

A:Â Annual rate of Interest is given as 17.70%. (compounding monthly)Monthly rate of interest (17.70/12)â€¦

*question_answer*

Q:Â Suppose you decide to deposit $18,000 in a savings account that pays a nominal rate of 6%, butâ€¦

A:Â In order to take investment decisions, the investor will look forward for evaluation. The evaluationâ€¦

*question_answer*

Q:Â Suppose that your bank pays 6% interest, compounded quarterly. Find out how much should be depositedâ€¦

A:Â Answer: Calculation of the amount that should be deposited now to yield an annuity payment of 1,500â€¦

*question_answer*

Q:Â A man wants to recieve P800 immediately and pay it back in one year. The bank charges a simpleâ€¦

A:Â Borrowings/Mortgage are the loan which is taken by the individual to meet its financialâ€¦

*question_answer*

Q:Â Suppose that you are about to borrow $10,000 from a bank. Suppose you will be repaying usingâ€¦

A:Â Bank charges interest rate when you borrow money and these are to be paid equal annual payment orâ€¦

*question_answer*

Q:Â How much would you need to deposit in an account now in order to have $4000 in the account in 5â€¦

A:Â We need to use compound interest formula given below to solve this problem. A=P(1+i)n Where A= Finalâ€¦

*question_answer*

Q:Â You put $1,000 into a savings account today that offers a 5% APR with semi-annual compounding (i.e.,â€¦

A:Â Effective annualized rate informs the rate effectively (considering the impact of compoundingâ€¦

*question_answer*

Q:Â If the nominal rate of interest paid on a savings account is 2% compounded monthly, what is theâ€¦

A:Â In this question we need to calculate the effective rate of interest.

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_forward*

*arrow_back_ios*

- SEE MORE QUESTIONS

*arrow_forward_ios*