8.4.21 You deposit $9000 in an account that pays 4.5% interest compounded quarterly. A. Find the future value after one year. B.. Use the future value formula for simple interest to determine the effective annual yield. A. The future value is $ (Round to the nearest cent as needed.)
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- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?
- Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?Classify the financial problem. Assume a 9% interest rate compounded annually. What annual deposit is necessary to give $10,000 in 6 years? A.future valueB.amortization C.sinking fundD.present valueE.ordinary annuity Answer the question. (Round your answer to the nearest cent.)Assume you make a deposit of $7,500 now into a saving account that pays 12% per year, compounded quarterly. If you want to know the total amount after 2 years, the value of interest rate (i) you should use in the F/P factor is: Select one: а. 3% b. 4 % с. 24% d. 12 %
- You deposit $11,000 in an account that pays 6% interest compounded quarterly. A. Find the future value after one year. B. Use the future value formula for simple interest to determine the effective annual yield. Click the icon to view some finance formulas. ..... A. The future value is $ 11675. (Round to the nearest cent as needed.) B. The effective annual yield is %. (Round to the nearest tenth as needed.)Find the future value for each of the following scenarios, where m is the periodic deposit and r is the interest rate. compounding time future E r frequency in years value $450 5.5% annually 9 $425 3.2% semiannually 7 $275 5.5% quarterly 13 S S $500 2.1% monthly 14 S $325 3% weekly 13 S S S interest earned(Related to Checkpoint 5.2) (Future value) (Simple and compound interest) If you deposit $1,000 today into an account earning an annual rate of return of 11 percent, in the third year how much interest would be eamed? How much of the total is simple interest and how much results from compounding of interest? GE If you deposit $1,000 today into an account eaming an annual rate of retum of 11%, in the third year how much interest would be eamed? (Round to the nearest cent)
- Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 7. Compound Interest A. If the sum of P 12,000 (pesos) is deposited in an account earning interest rate of 9% compounded quarterly, what will it become after 1 year? B. In the previous problem, what is the effective rate? C. What is then the equivalent nominal interest rate if compounded monthly?Give typing answer with explanation and conclusion A deposit of $450 earns the following interest rates: 9 percent in the first year. 7 percent in the second year. 6 percent in the third year. What would be the third year future value?What is the future value of the initial $10,000 deposit after 5 years? We assume current interest rate is = 6%, compounded monthly. $13,552.6 $13,512.5 $13,277.6 $13,488.5