To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $12,000 at 12% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? The compound interest rate that would yield the same amount of money in 3 years is % per year.
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- You deposit $200 each month into an account earning 5% interest compounded monthly. a) How much will you have in the account in 15 years? $ b) How much total money will you put into the account? $ c) How much total interest will you earn? $Eng. economics. If $2000 is invested at 7% interest compounded continuously calculate its value after 3 years.a. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded quarterly? b. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded monthly? c. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded daily? d. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded continuously? e. At what compounding period does the effective annual interest rate very closely approximate continuous compounding? (Consider to the nearest 0.0001)
- At what rate of interest will an investment double itself in 10 years?Use interest tables. Suppose that $1,000 is invested for 4 years at an interest rate of 12%, compounded quarterly. How much will be in the account at the end of 4 years? Choose an answer by clicking on one of the letters below, or click on "Review topic" if needed. A F = $1,000 (F/P,12%,4) = $1,000 (1.574) = $1,574 B F = $1,000 (F/P,12%,16) = $1,000 (6.130) = $6,130 C F = $1,000 (F/P,3%,4) = $1,000 (1.126) = $1,126 D F = $1,000 (F/P,3%,16) = $1,000 (1.605) = $1,605Investments Jack invests $1000 at a certain annual interest rate, and he invests another $2000 at an annual rate that is one-half percent higher. If he receives a total of $190 interest in I year, at what rate is the $1000 invested?
- Does the compounding increases the amount of interest paid over a year atthe same nominal interest rate?QUESTION 1 Muhammad takes out a loan of $ 2,130, at 8% simple interest, for 8 years. How much will he pay back at the end of year 8? QUESTION 2 Calculate the amount of interest on an investment of AED 103,971 at 8% simple interest for 5 years. QUESTION 3 If you deposit today $7,335 in an account for 6 years and at the end accumulate $10,885, how much compound interest rate (rate of return) you earned on this investment ? QUESTION 4 You will deposit 12,025 at 10% simple interest rate for 9 years, and then move the amount you would receive to an investment account at 12 % compound rate for another 3 years. How much money would you have at the end of the entire period ?How much money will you have in seven yearsif you deposit $7,000 in the bank at 8.5% interestcompounded daily?
- How quickly will 500$ will grow to 2000$ pesos if interest is 5% compounded quarterly?Liz plans to deposit $20,000 in the bank now and another $5,000 two years from now. If she plans to withdraw $8,000 three years after her last deposit, what will be the amount of money left in the bank after three years of her withdrawal? Use a 10% interest rate and draw a cash flow diagram.Simple vs. compounded interest. Show your complete solution and box your answers. To make CDs look more attractive than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is a simple interest rate. If a person deposits $10,000 at 10% per year simple interest, what compound interest rate would yield the same amount of money in 3 years?