2) Suppose you invested $1000 per quarter over a 15 year period. If money earns an annual rate of 6.5% compounded quarterly, how much would be available at the end of the time period. How much is the interest earned?
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2) Suppose you invested $1000 per quarter over a 15 year period. If money earns an annual rate of 6.5% compounded quarterly, how much would be available at the end of the time period. How much is the interest earned?
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- Suppose you invested $1000 semi-annually over a 10 year period. If money earns an annual rate of 12% compounded semi-annually, how much would be available at the end of the time period. How much is the interest earned?Suppose you invested $1000 every 3 months over a 15 year period. If money earns an annual rate of 6.5% compounded quarterly, how much would be available at the end of the time period. How much is the interest earned? Show all your calculationsIf you invest $3.000 today, how much would you have in your account in 35 years from now if the interest rates are 7.0256% per year? Assume interest is compounded semiannually. Answer with formulas in Excel will be appreciated.
- (a) Find the present and future value of an income stream of $6000 per year for a period of 10 years if the interest rate, compounded continuously, is 2%. Round your answers to two decimal places. Present value = $ Future value $ (b) How much of the future value is from the income stream? How much is from interest? Round your answers to two decimal places. The amount from the income stream is $ The amount from the interest is $Suppose an income stream will produce income at a rate of 4000 + 1000t dollars per year for 5 years, and is invested into an account that earns interest at an annual rate of 6% compounded continuously. (a) How much total income does the income stream produce? (b) How much money will be in the account after 5 years? (c) What is the present value of the income stream?set up an equation and solve each problem. Suppose that $500 is invested at a certain rate of interest compounded annually for 2 years. If the accumulated value at the end of 2 years is $594.05, find the rate of interest.
- Suppose we invest £100,000 at a semi-annually compounded interest rate of 6% for 1 year. What are the gross and net returns? Do the same if this was a monthly compounded rate and a continuously compounded rate. Compare the three net returns to the interest rate. Can you explain the ordering of these 4 quantities?Suppose the interest rate is3.6%. a. Having $650 today is equivalent to having what amount in one year? b. Having $650 in one year is equivalent to having what amount today? c. Which would you prefer, $650 today or $650 in one year? Does your answer depend on when you need the money? Why or why not? a. Having $650 today is equivalent to having what amount in one year? It is equivalent to $____. (Round to the nearest cent.)Use the formula A = Pert to find the future value after 20 years of a $7,000 account that earns 8% interest compounded continuously, then compare that to the future value of the same account if interest is compounded annually. Round to the nearest cent. The future value of the account with interest compounded continuously is The future value of the account with interest compounded annually is The account earns $____ (what dollar amount) [more/less] when interest is compounded continuously %24
- You make an investment into a money market account at time T=0. In year T=5, the value of the money market account will be $5,000. The money market account pays an annual interest of R=6%, and interest is compounded on a quarterly basis. What is the present value of this account?Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years?Approach(i) The first $100 is contributed in one year’s time and has to wait 4 years to “mature”. Write an equation describing this.(ii) The second $100 is contributed in two year’s time and has to wait 3 years to “mature”. Write an equation describing this.Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years? Approach (i) The first $100 is contributed in one year's time and has to wait 4 years to "mature". Write an equation describing this. (ii) The second $100 is contributed in two year's time and has to wait 3 years to "mature". Write an equation describing this. (iii) The third $100 is contributed in three year's time and has to wait 2 years to "mature". Write an equation describing this. (iv) Continue with this logic and sum all the matured values expressed