Assume that you deposit RM700 in a savings account that pays 5% per year over 6 years. Your savings benefits from _____ as you leave the interest earnings in your account, and your interest earnings increases every year. Select one: a. compounding b. accumulating c. discounting d. aggregating
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Assume that you deposit RM700 in a savings account that pays 5% per year over 6 years. Your savings benefits from _____ as you leave the interest earnings in your account, and your interest earnings increases every year.
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- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?Assume that you are depositing RM500 today in a savings account that pay 6% interest per year for 7 years. The term _____ value refers to the total value of the deposit after 7 years. Select one: a. principal b. future c. compound d. present2. Deposit the principal amount of P10,000 into a savings account that pays interest at the rate of 5%. What is the amount in the account after 1 year if the account is: a. compounded annually b. compounded semi-annually c. compounded quarterly d. compounded monthly e. Which is advantageous to the investor?
- If you deposit $P into a savings account that earns interest at a rate of i% per month for n years, the future worth in year n is represented by all of the following equations, except: (a) F = $P(F∕P, effective i/month, 12n) (b) F = $P(F∕P, effective i/quarter, 3n) (c) F = $P(F∕P, effective i/6-month, 2n) (d) F = $P(F∕P, effective i/year, n)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 decide to invest $7,500 into an account that pays 1.1% annual compound interest. Write an equation for the balance of the account (B) after t years.
- You open a savings account with $1,000. At the end of each year you earn 3% interest on your savings and then you deposit $1,000 into the account. Let An be the amount in the account after n years. 1. Explain why A₁ = 2,030. 2. Calculate A2 and A3. Round to the nearest penny if necessary. 3. Write a recurrence relation for An+1 in terms of An. What is the first term A₁?Suppose you deposit $1,500.00 into and account 7.00 years from today into an account that earns 14.00%. How much will the account be worth 14.00 years from today?If you deposit $100 in a savings account at the end of each month for 2 years, the balance will be a function f (r) of the interest rate, r%. At 7% interest (compounded monthly), f (7) = 2568.10 and f (7) = 25.06. Approximately how much additional money would you earn if the bank paid 7 1/2 % interest?
- K You plan to deposit $700 in a bank account now and $100 at the end of the year. If the account earns 7% interest per year, what will be the balance in the account right after you make the second deposit? ... The balance in the account right after you make the second deposit will be $ (Round to the nearest dollar.)Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays interest compounded daily? Show in excel to understand the calculationSuppose you receive $100 at the end of each year for the next 3 years. a) if the interest rate is 8%, what is the present value of the cash flows? b) what is the future value in 3 years of the present value you compute in a? c) suppose you deposit the cash flows in a bank account that pays 8% interest in a year. What is the balance in the account at the end of each of the nest 3 years (after your deposit is made)? How does the final bank balance compare with your answer in b?