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- Do the relevant calculations so you can indicate which you prefer: a bank account that pays 5.9% per year (EAR) for 3 years or a. an account that pays 2.3% every 6 months for 3 years? b. an account that pays 6.7% every 18 months for 3 years? c. an account that pays 0.38% per month for 3 years? (Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.) If you deposit $1 into a bank account that pays 5.9% per year for three years, the amount you will receive after three years is $. (Round to five decimal places.)The balance of an interest-bearing account can be modeled by an exponential equation. For example, consider an initial deposit of $10000 at an annual interest rate of 5%. The interest earned each year is deposited into the account at the end of the year. A. Assuming that no withdrawals or deposits are made, write an equation that models the account balance after x years. Your answer B. What is the account balance at the end of the 7 years? Your answer C. Create a graph that shows the increase in the account balance over the next 15 years, including your initial deposit. Your answer D. Using the graph, estimate how many years it will take for the initial deposit to double. Your answer E. If you deposited $5000O in an account of this type, what would the account balance be when you are 50 years old assuming that you are 20 years of age right now? Your answer OCT 16An investor has accumulated $4,450 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 9%. A one-year bank certificate of deposit will pay 11%, but the minimum investment is $7,450. Required: a. Calculate the amount of return the investor would earn if the $4,450 were invested for one year at 9%. b. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 19%, and then $7,450 were invested for one year at 11%. c. Calculate the net rate of return on the investment of $4,450 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places. a. Amount of return b. Net amount of return c. Net rate of return %
- Suppose a bank has the following Balance Sheet Assets Liabilities RSA = 120 RSL = 90 FRL = X FRA = 110 (Fixed rate liabilities can be found if needed by determining what number it must be to balance the balance sheet.) Suppose all the Assets and Liabilities were set last year when the interest rate was 10, if the interest rate has changed by 2% since that time what is the current cost from all of the bank's liabilities? Your Answer:Which do you prefer: a bank account that pays 5.3% per year (EAR) for three years or a. An account that pays 2.9% every six months for three years? b. An account that pays 7.8% every 18 months for three years? c. An account that pays 0.35% per month for three years? (Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.) If you deposit $1 into a bank account that pays 5.3% per year for three years: The amount you will receive after three years is $_______ (Round to five decimal places.) Part 2 a. An account that pays 2.9% every six months for 3 years? If you deposit $1 into a bank account that pays 2.9% every six months for three years: The amount you will receive after three years is $______(Round to five decimal places.) Part 3 Which bank account would you prefer? ▼ 5.3% per year for three years…Consider a credit card with a balance of $7000. You wish to pay off the credit card in each scenario. Calculate the following. Round your answer to the nearest cent, if necessary.a. The amount of a monthly payment within the time frame givenb. The total amount paid over the time period12. APR of 17.99% paid off within 1 year APR of 24% paid off within 3 years
- Which do you prefer: a bank account that pays 5.5% per year (EAR) for three years or a. An account that pays 2.8% every six months for three years? b. An account that pays 7.3% every 18 months for three years? c. An account that pays 0.46% per month for three years? (Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.) If you deposit $1 into a bank account that pays 5.5% per year for three years: The amount you will receive after three years is $ _____(Round to five decimal places.) Part 2 a. An account that pays 2.8% every six months for 3 years? If you deposit $1 into a bank account that pays 2.8% every six months for three years: The amount you will receive after three years is $_____(Round to five decimal places.) Which bank account would you prefer? (2.8 % every six months for three years/5.5% per…Suppose you borrow from a bank $1,756.06 today (t=0). You agree to pay back $3,637.64 in 4 years (t=4). The interest rate (%) that the bank charge you is closest to ________%. Input your answer without the % sign and round your answer to two decimal places.Read and analyze each given scenario and provide what is asked. Show your complete solutions. 1. It is now January 1, 20x8. Today you will deposit P100,000 into a savings account that pays 8%. a. If the bank compounds interest annually, how much will you have in your account on January 1, 20x9? b. What will your January 1, 20x9 balance be if the bank uses quarterly compounding? 2. It is now January 1, 2x16, and you will need P100,000 on January 1, 2x20. Your bank compounds interest at an 8% annual rate. How much must you deposit today to have a balance of P100,000 on January 1, 2x20? 3. If you deposited P200,000 in a bank account that pays 6% interest annually, how much will be in your account after five (5) years? 4. What is the present value of a security that will pay P290,000 in 20 years if securities of equal risk pay 5% annually? 5. What is the future value of a 5%, 5-year ordinary annuity that pays P8,000 each year? If this was an annuity due, what would be its…
- A bank features a savings account that has an annual percentage rate of r=3.4% with interest compounded weekly. Alfonso deposits $11,500 into the account. The account balance can be modeled by the exponential formula S(t)=P(1+r/n)^nt, where S is the future value, P is the present value, rr is the annual percentage rate, nn is the number of times each year that the interest is compounded, and tt is the time in years. What values should be used for P, r, and n?P= , r= , n= How much money will Alfonso have in the account in 10 years?Answer = $ .Round answer to the nearest penny. What is the effective annual rate for the savings account?effective rate = %.Round answer to 3 decimal places.To payoff a loan of $1000 you need to make 40 payment of $36.56 per month. What rate of interest are you paying? What is the stated or quoted rate? What is the annual percentage rate? What is the effective annual rate? What rate is bank likely to use to state its rate?You initially invest $400 in a savings account that pays a yearly interest rate of 3%. (a) Write a formula for an exponential function giving the balance in your account as a function of the time since your initial investment. (Let B be the account balance in dollars and t be the number of years since the initial investment.) 8(t)= dollars (b) What monthly interest rate best represents this account? Round your answer to three decimal places. % (c) Calculate the decade growth factor. (Round your answer to two decimal places.) (d) Use the formula you found in part (a) to determine how long it will take for the account to reach $536. (Round your answer to the nearest whole number.) yr Explain how this is consistent with your answer to part (c), At the end of one decade, there will be $ where the account reaches $536 at the end of This --Select-- o the answer found above years,