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- Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
- Assume that you want to have $ 2650 saved in a sinking fund in 1 year. The account pays 4.5% compounded monthly. What should be your monthly payments?You put \$1,000$1,000 into a savings account today that offers a 5\%5% APR with semi-annual compounding (i.e., two times per year). What is the effective annual rate of the saving account?Suppose your savings account pays 6% interest compounded monthly. If you deposit $18,000 forfour years, how much will you have?
- Suppose you have estimated that you will need $2,500 per month in your retirement to meet your expenses and live comfortably, and that you have found or chosen a fund (account) which pays monthly interest 4% APR . What principal, or balance, will your account need to maintain in order to be able to pay you this amount each month? Round/take your answer to the nearest cent.You are going to make the following contributions into a savings account: Year 1: $0 (1 year from today) Year 2: $1000 Year 3: $1000 Year 4: $2000 Year 5: $0 Year 6: $0 The account will earn 7.23% in interest per year. How much will be in the account exactly 6 years from today? To nearest $0.01How much money would you need to place in an account to have $1,000 10 years from today? Assume the account pays 8.5% and it is compounded monthly. Round to the nearest $1.
- Choose the appropriate formula type for answering the following question: Suppose you want to have $410,500 for retirement in 15 years. Your account earns 6.5% interest. How much would you need to deposit in the account each month? Annuity Compound Interest Loan/Payout AnnuityHow much should you be willing to pay for an annuity that begins in 3 years and pays $100 dollars each month for 9.7 subsequent years? Assume your monthly discount rate is 2%. Answer: CheckYou put $1,000 into a savings account today that offers a 5% APR with semi-annual compounding (i.e., two times per year). How much money will you have in the account after 2 years?
