A bank offers a CD that pays a simple interest rate of 4.5%. How much must you put in this CD now in order to have $4,000 for a home-entertainment center in 5years.The present value that must be invested to get $4,000 after 5 years at an interest rate of 4.5% is $(Round up to the nearest cent.)

Interest charged on the principal amount at a fixed rate for a fixed period of time is known as…

Answered: The present value that must be invested

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The present value that must be invested

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

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A bank offers a CD that pays a simple interest rate of 4.5%. How much must you put in this CD now in order to have $4,000 for a home-entertainment center in 5
years.
The present value that must be invested to get $4,000 after 5 years at an interest rate of 4.5% is $
(Round up to the nearest cent.)

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