Week 3 Practice

K- Suppose you start saving today for a $25.000 down payment that you plan to make on a house in 5 years. Assume that you make no deposits into the account after the initial deposit. For the account described below, how much would you have to deposit now to reach your $25,000 goal in 5 years An account with daily compounding and an APR of 6% You should invest $20787.15 (Do not round on the final answer. Then round to two decimal places as needed.) That's incorrect. Use the compound interest formula, where A is accumulated balance after Y years, P is starting principal, APR is annual percentage rate (as a decimal), nis number of compounding periods per year, and Y is number of years, to determine the amount, P, that you will have to invest APRY) A=P 1+ OK X

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6. You deposit $2100 in a savings account paying 5.5% simple interest. The solution to this problem is not accomplished by an excel formula. Use the formula I = PRT where T is in yearsa) How much interest will you earn in 18 months?         b) How much will be in your account at the end of 18 months?

QUESTION 3 Suppose you deposit $2.500 in a CD paying 8% interest, compounded every other month. How much will you have in the account after 15 years? Round your answer to the nearest cent. below is an example how to do problem mple 4 A certificate of deposit (CD) is a savings instrument that many banks offer. It usually gives a higher interest rate, but you cannot access your investment for a specified length of ime. Suppose you deposit $3000 in a CD paying 6% interest, compounded monthly. How much will you have in the accbunt after 20 years? In this example, Pa-$3000 1=0.06 -12 the initial deposit 6% annual rate 12 months in 1 year since we're looking for how much well have after 20 N=20 years 0.06 So P 3000 1+ 12 3D%2993061(round your answer to the nearest penny) %3D Let us compare the amount of money earned from compounding against the amount you would carn from simple interest Yars Simple Interest 6% compounded (S15 per month)monthly 0.5% each month 33900 $4800 $5700 $4046 55…

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Find r: You have $2,000 in a money market account. If you make no deposits to or withdrawals from this account, in 10 years you will have:     $10,000 in this account if the account’s interest rate is   $20,000 in this account if the account’s interest rate is

Paragraph UNDE bility: Good to go 2.. W 3.- VOR DUS IL MO13- earn her 12% compounded annually instead of 8%. How many years will it take her to rea her investment goals? d 5. Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $535 in two weeks. What is the compound annual rate implied by this percent rate charged for only two weeks? www. www www www 200 --- www Styles S u aut VE HAY 6. Given the same information in #5, what is the compound annual interest rate implied if the loan fee (interest) is $50? What is the compound annual interest rate implied. 6

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4. You are saving up for a cruise after graduation. The cruise will cost $1,500. How much must your save monthly if graduation is 19 months away and the current interest rate in your savings account is 2%? a. Assume your first deposit happens at the end of the month and the last deposit happens at the end of the 19th month i. $78.95 ii. $77.40 iii. $65.67 iv. $77.77 b. Assume your first deposit happens today and the last deposit happens at the end of the 18th month i. $77.64 ii. $77.90 iii. $79.33 iv. $76.24 5. Your rich great grandmother just passed away and left you $1 million dollars. She also attended UNO. You decided to set up a scholarship fund in her honor. a. You want to offer a full-ride scholarship in the amount of $25,000 per year forever. If the interest rate = 4%, how much money will you have left over for yourself after paying the endowment? i. $250,000 ii. $375,000 iii. $625,000 iv. $750,000 b. If you decide to give half of your inheritance to the university, how big of…

Give me right solution according to the question options also given A person deposits $150 per month into a savings account for 2 years. if $75 is withdrawn in months 5,7 and 8 (in addition to the deposits), construct the cash flow diagram to determine how much will be in the account after 2 years at i=8% per year, compound quarterly. Assume there is no interperiod interest. A. $ 2,045 B. $3609 C. $3090 D. $4050

Suppose I want to be able to withdraw $5,000 at the end of five years and withdraw $6,000 at the end of six years, leaving a zero balance in the account after the last withdrawal. If I can earn 5% on my balances, how much must I deposit today to satisfy my withdrawal needs? A. $8,394.92 B. $9,141.37 C. $8,402.55 D. $8,724.74 E. $7,568.94

Yingqi wants to have 1,000,000 in 5 years. How much should he deposit today into an account that earns an APR of 5.6% interest compounded continuously. Assume he makes no additional deposits or withdrawals. LSS-Comp O SP LSS-Cont LP O

REVIEW AND SELF-TEST PROBLEMS Calculating Future Values Assume you deposit $1,000 today in an account that pays 8 percent interest. How much will you have in four years? (See Problem 2.) 4.1 10+h hieth dou

Economics Testron A person deposits $150 per month into a savings account for 2 years. If 575 is withdrawn in months 47 and 8 (in addition to the deposits) construct the cash flow dugram to determine how much will be in the account after 2 years at i-6% per year, compounded quarterly. Assume there is no interperiod interest. O $3.549 $2.245 O $3,090 $4,050

Siyles Assume twwo banks have different offers to take a lone. Where the amount will be compound monthly. How much money you must pay on 10 years. Bank A Bank B Loan 75,000 5.25% 25,000 Interest Rate 5% 1. Calculate the monthly compounded amount for Bank A and B algebraically. 2. Calculate the monthly compounded amount for Bank A and B using MS excel 3.Decide which bank you will select and why. 4. find the annual rate of interest, compounded quartile will money double in 4 years?

14: Answer both questions

Imagine you have a credit card balance of $1,000 that you would like to pay off within one year. The annual interest rate on that credit card is 16%, but interest compounds monthly, and you are required to make a payment each month. What amount would you have to pay monthly to pay off this balance within one year? Question options: a $90.71 b $80.66 c $83.33 d $99.12

6: Answer both questions

Please do both question They are easy I will definitely upvote u

TEST I. PROMLEM SOLVING: A bank offers 0.25% annual simple interest rate for a particular deposit. How much interest will be earned if 1 million pesos is deposited in this savings account for 1 year? 1. Sunnose vour father denosited in vour bank account P10.000 at an annual interest rate of 0.5%

Time left 0:30:33 If you deposit OMR 8854 in your account in a bank. Suppose the bank pays 8% compound interest yearly. you are required to calculate future value of your money in 7 years. t of 2 estion O a. 19114.90 O b. 13009.18 O C. All the given choices are not correct O d. 10772.22 O e. 15174.20 L 78%

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