For the next two questions, assume the interest rate is 6% compounded annually. Use the online calculators. If you would like to receive $100 a year for five years, at the end of each year, how much do you need to place into the bank today? If you would like to receive $500 a year for five years, at the end of each year, how much do you need to place into the bank today?
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- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse Excel to answer the following questions. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?A bank will pay you $100 a year for your lifetime if you deposit $2,500 in the bank today. If you plan to live forever, what interest rate is the bank paying?
- Suppose you have a different option to deposit $500 in a savings account at the beginning of each year for 5 years. How much would you have if the account paid 4.25%?Suppose you want to withdraw $20,000 at the end of year 3 and another $20,000 at the end of year 5. The account's interest rate is 5% compounded annually. A How much should you deposit now? B) Suppose you realize you can only deposit $10,000 today, but you expect to have more funds available in 1 year. How much must you deposit into the account at the end of year 1 so that you can still make the necessary withdrawals at the end of years 3 and 5?If you deposit OMR 20555 in your account in a bank. Suppose the bank pays 8% compound interest half yearly. Calculate future value of your money in 5 years.
- Choose the appropriate formula type for answering the following question: Suppose you want to have $410,500 for retirement in 15 years. Your account earns 6.5% interest. How much would you need to deposit in the account each month? Annuity Compound Interest Loan/Payout AnnuityIf you deposit in a bank $200 today, $250 a year from now, $150 in the second year and $300 in the third year, how much you find in your banj account in the 3rd year if the interest is 10%?You have decided to start a savings plan for your retirement. You plan to make an annual deposit of $50,000 each year for the next 6 years. The first deposit to be made one year from today. The bank pays a nominal interest rate of 5% annually. How much your savings account with the bank be if you leave the money in the bank to be withdrawn all in 19 years from today? Round to the nearest $0.01. DO NOT use the $sign. Do not use commas to separate thousands. For example if you obtain $1,433.728 then enter 1433.73; if you obtain $432 then enter 432.00 Your Answer: Answer