= A bank features a savings account that has an annual percentage rate of r interest compounded quarterly. Tatiana deposits $9,000 into the account. a = r = The account balance can be modeled by the exponential formula A(t) = a(1+ where A is account value after t years, a is the principal (starting amount), r is the annual percentage rate, k is the number of times each year that the interest is compounded. (A) What values should be used for a, r, and k? I k = 5.6% with (B) How much money will Tatiana have in the account in 7 years? Answer = $ Round answer to the nearest penny. r kt (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year). APY = %. Round answer to 3 decimal places.

= A bank features a savings account that has an annual percentage rate of r interest compounded quarterly. Tatiana deposits $9,000 into the account. a = r = The account balance can be modeled by the exponential formula A(t) = a(1+ where A is account value after t years, a is the principal (starting amount), r is the annual percentage rate, k is the number of times each year that the interest is compounded. (A) What values should be used for a, r, and k? I k = 5.6% with (B) How much money will Tatiana have in the account in 7 years? Answer = $ Round answer to the nearest penny. r kt (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year). APY = %. Round answer to 3 decimal places.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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.
Stella deposits $1,250 in a bank account that pays 10.5% Interest compounded monthly. In 7 years, how much does she have in this account? t=0 $1250 n Cash Flow Diagram ------------- N Time Value of Money (TVM) Framework PV PMT FV type CPT What Excel function and arguments to that function would you use to compute this value? =function rate, nper, pmt. [PV], [type]) What is the compounding factor that would be used to compute the growth of the principal after one year?
Sophia invests $8,059 in a savings account that offers an annual percentage rate (APR) of 6.5%. Unlike typical savings accounts, this account compounds interest continuously. What is the effectiv annual rate (EAR)? O 6.50% 6.72% O 6.61% 106.72% 6.66%
3. Answer both A and B questions A. What are the differences between the simple interest and compound interest? (Elaborate, minimum of three sentences). B. An investor deposited OMR 9,000 into an account paying 8% annual interest compounded quarterly. (Use the compounded interest formula). Calculate the following. 1. How much money will be in the account after 5 years? 2. How much money will be in the account after 9 years? 3. How much money will be in the account after 3 years? Answer:
You have just deposited X dollars in your bank account that pays interest of 6 percent p.a. You discover that at the end of one year you have $ 10,044 in the account. What was X, that is, the amount of money that you deposited today? (Record your answer without a dollar sign, without commas and round your answer to 2 decimal places; that is, record $3,245.847 as 3245.85).
A customer has a balance of $4,000 to be invested in a savings account with 5% interest per year. A. Calculate the Future Value in the account in the 2nd year, 6th year and 10th year? B. From the results found in question A, calculate the amount of interest earned on: first two years (years 1 to 2)the next four years (years 3 to 6)past four years (years 7 to 10) C. From the results obtained in question B, why does the amount of interest earned increase in each subsequent period?
Need answers ASAP... If P100 is deposited in a savings account that pays 6% annual interest, what amount has accumulated by the end of the eighth year? How much of this is interest and how much is principal? Draw the cash flow diagram.
Would love the help. 11
Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in the interest rate cells.) At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8% compounded annually. How much is in the account today? How much would be in the account if the deposits were made at the beginning of each year (PMT Type) than at the end of each year? (Use Future Value of an Annuity) Suppose your opportunity cost (interest rate/year) is 11% compounded annually. How much must you deposit in an account today if you want to pay yourself $230 at the end of each of the next 15 years? How much must you deposit if you want to pay yourself $230 at the beginning of each of the next 15 years? Bruce invested $1,250 (present value - enter as a negative number) 10 years ago. Today, the investment is worth $3,550 (future value). If interest is compounded annually, what annual rate of return did Bruce earn on his investment? (Use Solving for r…
Once per year Ritchie Rich deposits an amount of $800 in an account which pays 10% interest per year, compounded annually, with additional deposits of $800 continually made at the end of the year. If B, is the balance in the account, in dollars, immediately after Ritchie makes the nth deposit, then we can write B₁ = $800. (a) Complete the table to find the following. Report to the nearest $0.01. i) the balance, B, of the account on the day immediately after the second deposit. ii) the balance, B₁, of the account on the day immediately after the third deposit. iii) the balance, B₁, of the account on the day immediately after the fourth deposit 71 (Number of deposits) 1 2 OO B= $321158.22 (b) Suppose Ritchie makes 38 deposits. What is the balance of the account on the day immediately after the 38th deposit? 0 B$29923.47 B$29123.47 B= $264031.59 B, ($) $800 $ Number O B$291234.75 (It is more than $880.) $ Number S Number Q (c) Suppose Ritchie makes 438 deposits. Which is true about the…
The following certificate of deposit (CD) was released from a particular bank. Find the compound amount and the amount of interest earned by the following deposit. $2500 at 6% compounded daily for 2 years. What is the compound amount? (Round to the nearest cent.)
2. What is the effective annual interest rate in each situation? Show and explain all supporting calculations. a. A savings account with 4% annual interest rate compounded daily (assume a year consists of 365 days)? b. A savings account with 4% annual interest rate compounded monthly?

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