At the annual family barbeque, your Uncle John told you that he deposited $50,000 in a bank acco Consumer Price Index (CPI) was 300. A year later, the balance in Uncle John's bank account was was 306. What was Uncle John's real rate of return over the year? The real return was closest to: ○ A. 38% B. 35.52% C. 37.25% OD. 40%
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- Question 1 (a) Explain the differences between annual percentage rate (APR) and effective annual rate (EAR). (b) Phoebe is considering selling her entire stock holding and depositing the money ($500,000 in total) into a bank account. She has obtained the following information about two banks: Bank X: 12% APR with monthly compounding Bank Y: 13% APR with semi-annual compounding (i) Based on the comparison of the yearly rate of return, which bank would Phoebe prefer? Provide supporting calculations. (ii) How much money will Phoebe have in Bank X’s account five years from now if the money remains in the account during the period? Provide supporting calculations. (iii) How much money will Phoebe have in Bank X’s account if the interest earned is withdrawn at the end of each month to pay for living expenses of the following month? Explain (without calculation) in NO MORE THAN THREE LINES your answer. (iv) Explain the difference in the bank account balance in parts (ii) and (iii), with…When your father was born 44 years ago, his grandparents deposited $400 in an account for him. Today, that account is worth $40,000. What was the annual rate of return on this account? Multiple Choice: 11.03 percent 10.30 percent 12.14 percent 8.24 percent 10.59 percent(a) Explain the differences between annual percentage rate (APR) and effective annual rate (EAR). (b) Phoebe is considering selling her entire stock holding and depositing the money ($500,000 in total) into a bank account. She has obtained the following information about two banks: Bank X: 12% APR with monthly compounding Bank Y: 13% APR with semi-annual compounding (i) Based on the comparison of the yearly rate of return, which bank would Phoebe prefer? Provide supporting calculations. (ii) How much money will Phoebe have in Bank X’s account five years from now if the money remains in the account during the period? Provide supporting calculations.
- John began his investing program with a $5,500 initial investment. The table below recaps his returns each year as well as the amounts he added to his investment account. What is his dollar-weighted average return? Time 0 1 2 3 4 A) 1.5 percent B) 2.2 percent C) 2.0 percent D) 1.8 percent E) 2.6 percent Investment $ 5,500 $ 2,000 $ 2,600 $ 3,000 $ 900 Return 8.5 % 5.0 % 4.5% 9.0 % 2.5%Suppose you have saved $216 each month for the last 7 years to make a down payment on a house. The account earned an interest rate of 0.53 percent per month. How much money is in your account? Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. Remember to enter the final answer as a positive number.Michael has a bank account that is worth $80,550. (a) Find the overall ROR if he had deposited $50,000 five years ago and left it undisturbed until now ? (b) Find the real ROR If the inflation over that period was 4% per year ? (c) What is the buying power of his money now compared to the buying power 5 years ago ?
- There is an investor stating they will pay out $84,000 at the end of 4 years. In order to invest into the opportunity, you'll need to make a deposit of $10,000 to thier indicated bank account. What is the average annaul return rate. Use excel functions to indicate your steps.You borrowed an X amount of money from a local bank to be repaid over N months at an interest rate i (assume your own numbers for X, i, M). I need : (a) Create a table (using Excel) showing each month's interest in $ (I), principal repayment, and amount of principal remaining at the end of each month. (b) Suppose that you decided to pay out the remaining principal all at once after few monthly payments (< N), how much will you pay? Use the P /A relationship to answer this part and compare to the numbers in the table.A woman went to the Beneficial Loan Company and borrowed S10,000. She must pay S323.53 At the end of each month for the next 60 months. A. What is the Monthly Interest rate she is paying? What is the Nominal Interest rate? С. What is the Effective Interest rate? Make your cash flow diagram and solve. B.
- (a) Explain the differences between annual percentage rate (APR) and effective annual rate (EAR). (b) Phoebe is considering selling her entire stock holding and depositing the money ($500,000 in total) into a bank account. She has obtained the following information about two banks: Bank X: 12% APR with monthly compounding Bank Y: 13% APR with semi-annual compounding (iii) How much money will Phoebe have in Bank X’s account if the interest earned is withdrawn at the end of each month to pay for living expenses of the following month? Explain (without calculation) in NO MORE THAN THREE LINES your answer. (iv) Explain the difference in the bank account balance in parts (ii) and (iii), with supporting calculations by showing the 5-year interest on principal, 5-year interest on interest and the total interest.You acquired the following capitals for your own business. $100,000 comes from your family, which is interest free. $200,000 comes from your best friend. He charges you 4% APR for the loan. $300,000 comes from a bank as a 10 year note. The bank charges you 7.5% APR for the loan. Assume there is no tax, what is your WACC? (Please round up your answers to two decimals and write in percentage points. e.g. If your answer is 8.7896%, type 8.79 without the percentage sign)If Tara invests $10,000 at 5% interest for 5 years, what will her earnings be at the end of the 5 years? Select one: a.$12,500.00 b.$607.75 c.$2762.81 d.$500.00 Question 2 Question text To express ROI as a percentage, multiply the result of the calculation by _____. Select one: a.10 b.100 c.200 d.1000 Question 3 Question text Which of the following is an example of a limited partnership? Select one: a.Noah and Evan own a used-book store. When the company loses money, the two share the losses equally. b.Kate is the sole owner of her lawn care company. At the end of each business year, she pays all of the taxes on her profits. c.Leah runs a graphic design corporation but has two partners who each own 5 percent of the company. She pays personal income taxes, and her partners pay taxes in proportion to their ownership. d.Sean and Maya are partners in a family business. At the end of the business year, they can declare their losses as a tax deduction, and are…