QUESTION 11Tony deposits 1000 into a saving account. For the first 5 years the money accumulates with a force of interest 8-4%. For the next 3 years the money accumulates at a nominal discountrate of 6% convertible semiannually. At the end of 10 years the money has earned at an annually effective rate of 5.2%. What was the nominal interest rate convertible quarterly forthe last 2 years?Ⓒa.5.4m846.5m06.09d. 6.3m

Accumulation of an investment occurs at different rates, in different time periods. The overall rate…

Answered: Tony deposits 1000 into a saving…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Part B: Suppose a bank offers you a rate of 5% compounded quarterly. If you put $8,000 into this account today, how much will you have at the end of 7 years? Interest rate: savings amount: years: Number of compound periods: compounded rate: Amount at the end of the period: Please show formulas
Q: Assume that you will be opening a savings account today by depositing $125,000. The savings account will pay you 7.5% annual interest compounded quarterly, and this rate is assumed to remain in effect for all future periods. Five years from now you will withdraw R dollars. You will continue to make additional withdrawals of R dollars for a while longer –making your last withdrawal at the end of year 12 – to achieve the required pattern of withdrawals. How large must R be to leave you with exactly a zero balance after your final withdrawal is made at the end of year 12?
Problem #8: An initial deposit of $11500 is made into an account now, and a second deposit of $25000 is made into the same account after 15 years. During the first 10 years, the account earns interest quoted at a nominal quarterly discount rate of d%. After 10 years have passed, any money in the account earns a nominal semi-annual interest rate of 7.1%. At the end of 30 years, the total value of the account will be $183062. What is the value of d (to the nearest 0.1%)?
Accounting What is the value of the following payment stream 1 year from now, at a simple interest rate of 4.4%. $10,000 3-years ago, $6,000 1.25 years ago, $12,000 due in 3 years, $18,000 due in 5 years. What is the value of the payment stream at the focal date?
FIRST ASSIGNMENT: The difference between Compound Interest and Q1 Simple Interest on a certain sum of money at 10 % per annum for 3 years is Rs. 930. Find the principal if it is known that the interest is compounded annually. What would $1000 become in a saving account Q2 at 3% per year for 3 years when the interest is not compounded (simple interest)? What would the same amount become after 3 years with the same rate but compounded annually? $1200 is placed in an account at 4% Q3 compounded annually for 2 years. It is then withdrawn at the end of the two years and placed in another bank at the rate of 5% compounded annually for 4 years. What is the balance in the second account after the 4 years. An amount of $1,500 is invested for 5 years Q4 at the rates of 2% for the first two years, 5% for the third year and 6% for the fourth and fifth years all compounded Annually. What is the total amount at the end of the 5 years? A principal of $2000 is placed in a savings Q5 account at 3% per…
Suppose you borrowed $15,000 at a rate of 11.1% and must repay it in 5 equal installments at the end of each of the next 5 years. How much interest would you have to pay in the first year? a. $1,248.75 b. $1,665.00 C. $1,714.95 d. $1,481.85 e. $1,615.05
An Initial payment of $6,000 is deposited Into a bank with a nominal annual Interest rate of 9.5%, compounded semi-annually. You would like to withdraw this amount In in a series of 5 equal annual sums, with the first withdrawal being 1 year form the deposit. What is the amount that should be withdrawn each year? O $3,571.71 $2,571.71 O $2,271.71 O $1,571.71
What is the amount of 10 equal annual deposits that can provide five annual withdrawals, when a first withdrawal of $3,000 is made at the end of year 11, and subsequent withdrawals will increase by $200 over the previous year’s, if the interest rate is 8% compounded annually? A.$785 B.$4,588 C.$928 D.$9,904
Question 2 A 10-year continuous stream of payments consists of payments at a rate of $1, 000 per year for the first 5 years, then at rate of $500 per year from t = 5 to t = 10. At an interest rate of 6.6% convertible monthly, what is the present value of this payment strea
You are able to make a current deposit in the amount of $21,605.49. The expected discount rate is 9.6%. Interest is earned on an annual basis. The time period is 10 years. What is the size of the annual withdrawal possible under these circumstances? a. $2,160.54 b. $3465.00 c. $3,456.00 d. $4,356.00
A deposit of $1000 compounds to $2500 in 5 years. The interest on this account compounds quarterly. What is the closest nominal annual rate of return? (a) 2.50% (b) 4.70% (c) 18.75% (d) 20.11%
2. Deposit the principal amount of P10,000 into a savings account that pays interest at the rate of 5%. What is the amount in the account after 1 year if the account is: a. compounded annually b. compounded semi-annually c. compounded quarterly d. compounded monthly e. Which is advantageous to the investor?

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