Question Number 2: [CLO5, PLO3] A $10,000 certificate of deposit earns simple interest of 8 percent per year. Calculate the total earned money over the 5 year period? A. A sum of $22,000 is invested in a savings account which pays interest at the rate of 7 percen per year compounded quarterly. If the amount is kept on deposit for 10 years, what will the compound amount equal? How much interest will be earned during the 10 Years. B. A Company wants to deposit $1,000,000 per year in an investment which earns interest of 10 percent per year. Assume the first deposit is made at the end of the current year and addidtiona deposits at the end of each following year. a) To what sum will the investment grow at the time of the 10th deposit? b) How much interest will be earned. C. A person wants to generate four intallments of $1,000 in the following four years. How much
Question Number 2: [CLO5, PLO3] A $10,000 certificate of deposit earns simple interest of 8 percent per year. Calculate the total earned money over the 5 year period? A. A sum of $22,000 is invested in a savings account which pays interest at the rate of 7 percen per year compounded quarterly. If the amount is kept on deposit for 10 years, what will the compound amount equal? How much interest will be earned during the 10 Years. B. A Company wants to deposit $1,000,000 per year in an investment which earns interest of 10 percent per year. Assume the first deposit is made at the end of the current year and addidtiona deposits at the end of each following year. a) To what sum will the investment grow at the time of the 10th deposit? b) How much interest will be earned. C. A person wants to generate four intallments of $1,000 in the following four years. How much
Fundamentals of Financial Management (MindTap Course List)
14th Edition
ISBN:9781285867977
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter5: Time Value Of Money
Section: Chapter Questions
Problem 27P: EFFECTIVE VERSUS NOMINAL INTEREST RATES Bank A pays 4% interest compounded annually on deposits,...
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![Question Number 2: [CLO5, PLO3]
A $10,000 certificate of deposit earns simple interest of 8 percent per year. Calculate the total
earned money over the 5 year period?
A. A sum of $22,000 is invested in a savings account which pays interest at the rate of 7 percent
per year compounded quarterly. If the amount is kept on deposit for 10 years, what will the
compound amount equal? How much interest will be earned during the 10 Years.
B. A Company wants to deposit $1,000,000 per year in an investment which earns interest of 10
percent per year. Assume the first deposit is made at the end of the current year and addidtional
deposits at the end of each following year.
a) To what sum will the investment grow at the time of the 10th deposit?
b) How much interest will be earned.
C. A person wants to generate four intallments of $1,000 in the following four years. How much
money should be invested, if the interest rate is 10 percent per year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0dece5d7-20ce-4eb0-8f10-0c0c764a3539%2F69faefb3-a54d-4e52-99c4-26366dff03b4%2F2efc4y_processed.png&w=3840&q=75)
Transcribed Image Text:Question Number 2: [CLO5, PLO3]
A $10,000 certificate of deposit earns simple interest of 8 percent per year. Calculate the total
earned money over the 5 year period?
A. A sum of $22,000 is invested in a savings account which pays interest at the rate of 7 percent
per year compounded quarterly. If the amount is kept on deposit for 10 years, what will the
compound amount equal? How much interest will be earned during the 10 Years.
B. A Company wants to deposit $1,000,000 per year in an investment which earns interest of 10
percent per year. Assume the first deposit is made at the end of the current year and addidtional
deposits at the end of each following year.
a) To what sum will the investment grow at the time of the 10th deposit?
b) How much interest will be earned.
C. A person wants to generate four intallments of $1,000 in the following four years. How much
money should be invested, if the interest rate is 10 percent per year.
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