In your own words, explain how compounding works. According to therule of 72, if you deposit $100 in an account that pays 9% compoundinterest, how long will it take that initial deposit to reach $200?Use the matrix given below. For each type of investment, record thisinformation: • Is the risk high, moderate, or low? • Is the return high,moderate, or low? • How does this type of investment work? Explainin one or two sentences.

According to Rule of 72, a deposit is doubled in X number of years. That X number of years is…

> In your own words, explain how compounding works. According to the rule of 72, if you deposit $100 in an account that pays 9% compound interest, how long will it take that initial deposit to reach $200?

> In your own words, explain how compounding works. According to the rule of 72, if you deposit $100 in an account that pays 9% compound interest, how long will it take that initial deposit to reach $200?

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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Question

In your own words, explain how compounding works. According to the
rule of 72, if you deposit $100 in an account that pays 9% compound
interest, how long will it take that initial deposit to reach $200?
Use the matrix given below. For each type of investment, record this
information: • Is the risk high, moderate, or low? • Is the return high,
moderate, or low? • How does this type of investment work? Explain
in one or two sentences.

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Use Table 12-1 to solve. Suppose Jorge Otero has set up an annuity due with a certain credit union. At the beginning of each month, $150 is electronically debited from his checking account and placed into a savings account earning 6% interest compounded monthly. What is the value (in $) of Jorge's account after 18 months? (Round your answer to the nearest cent.) $ Submit Answor
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Solve for the (1) in the blank Assume that you save 22,000USD to keep on the 1st day of every month under the systems, keeping in your home or monthly 7% simple interest in the bank. Put the balance at the beginning of n th month under the system. keeping in your home Mn and simple interest Sn Sn Then, the first chance when ≥ 2 is at the beginning of (1) th month. Mn Hint: Calculate the cases n = 1, 2, 3, ... to find the rule.
If you deposit $700 in a bank account that earns 5 percent per year, how much total interest will you have earned after the third year? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Total Interest =
11. Suppose you have a balance of $5400 on your credit card, which charges an APR of 18%. If you want to pay off the balance in 18 months, how much should you pay each month? What is the total amount of interest you will end up paying? Assume that you charge no additional expenses to the card. 5400 012
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Solve the problem below. 2. Suppose that your bank has a minimum loan charge of $48 when you borrow at 6% ordinary interest for 90 days. What principal borrowed will result in a $48 interest charge?

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