First City Bank pays 7.5 percent simple interest on its savings account balances, whereas Second City Bank pays 7.5 percent interest compounded annually. If you made a deposit of $8,600 in each bank, how much more money would you earn from your Second City Bank account at the end of eight years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Difference in accounts

First City Bank pays 7.5 percent simple interest on its savings account balances, whereas Second City Bank pays 7.5 percent interest compounded annually. If you made a deposit of $8,600 in each bank, how much more money would you earn from your Second City Bank account at the end of eight years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Difference in accounts

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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Suppose $1,200 is deposited into an account which has an annual percentage rate of 9.81% per year. Assume it remains in the account for 18 years and no additional money is added to the account other than interest. (a) Complete the boxes below to write an expression for the amount (in dollars) at year x = 18, of assuming interest is compounded annually. Do not round any values. You can enter arithmetic expressions (containing +, -, *, /, or ^) in any of these boxes. Number 1200 •( Number What is the value in year x = 18 of an investment of $1,200 dollars which pays 9.81% compounded annually? $ Number (Round to the nearest 0.01 dollars) (b) Complete the boxes below to write an expression for the amount (in dollars) at year x = 18, assuming interest is compounded weekly (52 times per year). Do not round any values. You can enter arithmetic expressions (containing +, –, *, /, or ^) in any of these boxes. Number 1200 ( Number What is the value in year x = 18 of an investment of $1,200…
you deposit $5,000 in a bank t years ago. Your current account balance is $8,200, and the bank compounded intrest monthly at an intrest rate of 3.5%. how long ago did you deposit the money? that is, find t. round your answer to the nearest tenth of a year.
John and Susan just opened saving accounts at two different banks. They each deposited $1000. John's bank pays simple interest at an annual rate of 10%, where as Susan's bank pays compound interest at annual rate of 9.5%. No interest will be taken out of the accounts for a period of three years. At the end of three years, whose balance will greater and bytes how much (to the nearest dollar)?
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).
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…
Simmons Corporation can borrow from its bank at 21 percent to take a cash discount. The terms of the cash discount are 2.5/14, net 50. Compute the cost of not taking the cash discount. Note: Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places.
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.)
Bank of vancouver pays 7% simple interest on its saving account balances, whereas bank of calgary pays 7% interest compounded anually. If you made a $6000 deposit in each bank, how much more money would you earn from your bank of calgary account at the end of nine years?
First American Bank charges 10.8 percent compounded monthly on its business loans. First Fifth Bank charges 11 percent compounded semiannually. Calculate the EAR for each bank. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) f3 First National Bank First United Bank % % As a potential borrower, which bank would you go to for a new loan? ** f4 f5 f6 Search ムー 17 4+ First National Bank hp f8 fg f10 144 DII DDI f11
First City Bank pays 5 percent simple interest on its savings account balances, Second City Bank pays 5 percent interest compounded annually. If you made a deposit of $13,500 in each bank, how much more money would y from your Second City Bank account at the end of 11 years? (Do not round inter calculations and round your answer to 2 decimal places, e.g., 32.16.) Difference
Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8% compounded annually. In other words, how much do you have to deposit now (with the second deposit in the amount of $1,000 at the end of the first year) so that you will be able to withdraw $600 at the end of the second year through the fourth year , and $ 800 at the end of the fifth year , where the bank pays you 8% annual interest on your balance ?
= A bank features a savings account that has an annual percentage rate of r interest compounded quarterly. Tatiana deposits $9,000 into the account. The account balance can be modeled by the exponential formula A(t) = a (1 + 7-)kt, 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? a = r = 5.6% with k = (B) How much money will Tatiana have in the account in 7 years? Answer = $ 7. Round answer to the nearest penny. APY = = %. Round answer to 3 decimal places. (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).

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