You plan to deposit $5,000 today in an account that pays 8% compounded annually. How much interest on interest will you earn during the nine years? A. $1,195 B. $1,295 C. $1,395
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You plan to deposit $5,000 today in an account that pays 8% compounded annually.
How much interest on interest will you earn during the nine years?
A. $1,195
B. $1,295
C. $1,395
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- A bond pays $1000 in 5 years an earns an annual interest rate of 2.75%. What is the bond's price? Assume annual compounding. Round your answer to two decimal places.Today, you invest ₱100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow ₱50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking ₱20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was withdrawn? Note: Draw the cashflow diagramToday, you invest ₱100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow ₱50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking ₱20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was withdrawn? Note: Draw the cashflow diagram and solve using the formula of annuities
- You are making semiannual deposits into a fund that pays interest at rate of9% compounded continuously. What is the effective semiannual interest rate?(a) 4.000%(b) 4.708%(c) 4.164%(d)4.175%Calculate the price of a zero-coupon bond that matures in 20 years if the market interest rate is 3.8 percent. Assume semiannual compounding. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)Suppose a man purchases a luxury car with an initial down payment of $20,000 and then makes quarterly payments: $2000 at the each of each quarter for six years and $3500 at the end of each quarter for eight more years. Given an interest rate of 6% compounded quarterly, find the present value of the payments and the list price of the luxury car.
- 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?How long will it take any sum to double itself with an 11% interest rate compounded continuously? a) 4.8 years b) 6.3 years c) 5.2 years d) 3.4 yearsA company has issued a 20 year bonds, with a face value of $50,000 interest at 8% is paid quarterly. If an investor desires to earn 12% compounded quarterly, what would be the purchase price of the bond? $12, 654.40 $42, 563 $35, 062.60 $ 34, 900.80
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