FOCUS ON PERSONAL FINANCE LL/ACCESS >BI
6th Edition
ISBN: 9781260529326
Author: Kapoor
Publisher: McGraw-Hill Publishing Co.
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Question
Chapter 1, Problem 5P
Summary Introduction
To discuss: The annual earnings.
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A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 6%. What is your approximate annual real rate of return if the rate of inflation was 2% over the year?
A. 6%
B. 4%
C. 2%
D. 3%
If $25,000 is deposited in a 5% savings account and inflation is 3%, what is the value of the account at the end of Year 20 in Year-0 dollars? If the time value of money is 4%, what is the present worth?
How much will $7500 in savings today be worth 5 years from now if it earns 6%, compounded monthly?
a. $11,465
b. $15.091
c. $7.955
d. $247,408
e. $7,686
Chapter 1 Solutions
FOCUS ON PERSONAL FINANCE LL/ACCESS >BI
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- The equation, A = P(1 + 0.037t), represents the amount of money earned on a savings account with 3.7% annual simple interest. If the amount after 5 years is equal to $1,422, what is the amount of the principal investment? $1,200 $1,422 $274.25 $294.86arrow_forwardSuppose you invest $3,800 today in an account that earns a nominal annual rate (inom) of 12 percent, with interest compounded quarterly. How much money will you have after 12 years? a. $5,417.89 b. $15,702.56 c. $14,804.71 d. $875,484.95 e. $51,072.00arrow_forwardWhat would be the value of a savings account started with $1,200, earning 3 percent (compounded annually) after 10 years?arrow_forward
- What would be the annual percentage yield for a savings account that earned $60.00 in interest on $1,000 over the past 365 days?arrow_forwardSuppose you have $1500 in your savings account at the end of a certain period of time. You invested $1100 at a 5.37% simple annual interest rate. How long, in years, was your money invested?arrow_forwardSuppose that $8000.00 was invested in a savings account that paid 2.5% interest compounded quarterly. How much interest would be earned after 3 years?arrow_forward
- A savings account’s value today is $150 and it earns interest at 1% per month. How much will be in the account one year from today? Which of the following is correct to solve for the unknown value? (a) P = 150(1 + 0.01) 12 (b) 150 = F(F/P, 12%, 1) (c) F = 150(1.12) −12 (d) F = 150(F/P, 1%, 12arrow_forwardA sum of 2 million is equivalent to 2.36 million one year from now. Find interest rate?arrow_forwarda) What would be the accumulated value of ₺ 100.000 in a saving account at 8% per year for 5 years when the interest is compounded? b) What would be the accumulated value of the same amount after 9 years with the same rate but not compounded (simple interest) annually?arrow_forward
- How much do you have to invest today in a savings account that returns 6.5% interest, compunded annually, to get $25,300 at the end of 10 years?arrow_forwardIf you put 1,000 in a savings account that yields an 7℅ annual rate of interest that is compounded weekly, how much would that be worth in 25 weeks? How do I solve this problem on a financial calculator?arrow_forwardHow much you have in 3 1/2 years if you invests P8,000 at 6.6 percent interest compounded monthly?arrow_forward
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