If a bank says that it has a 5% nominal interest rate, but money is compounded monthly in that bank, what is the effective annual interest rate? What is the value of an account 10 years after it started? The initial balance in the account was $5000, and the account has 5% annual interest rate that is compounded monthly.

If a bank says that it has a 5% nominal interest rate, but money is compounded monthly in that bank, what is the effective annual interest rate? What is the value of an account 10 years after it started? The initial balance in the account was $5000, and the account has 5% annual interest rate that is compounded monthly.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section6.1: Why Save?

Problem 6R

See similar textbooks

Similar questions

You borrowed an amount of $15,000 and paid it $20,223 in 3 years. If the interest rate was compounded monthly, what is the nominal interest rate?
You invest 10,000 pesos for 3 years and get 10% interest compounded at the end of each year. What is the compound interest?
You can afford a $1500 per month mortgage payment. You've found a 30 year loan at 7% interest compounded monthly.a) How big of a loan can you afford?$b) How much total money will you pay the loan company?$c) How much of that money is interest?$
How long your money would double its amount if you invested at 5%compounded annually?
Karen and Sophia want to buy a $225,000 home. They plan to pay 20% as a down payment, and take out a 30 year loan at 3.95% interest for the balance. a) How much is the loan amount going to be? b) What will the monthly payment be for Karen and Sophia? c) How much of the first payment is interest? d) What is the total of the payments? e) How much interest was paid?
Mr. Bill deposited 100,000 pesos in bank account earning interest at the rate of 10% compounded quarterly, what will it become at the end of 10 years?
John paid $500 per month for 20 years to pay off a mortgage on his house. If his down payment was $5,000 and interest rate was 6% compounded monthly, what was the purchase price of this house? do it fast
How long in years will it take money to quadruple if it earns 7.5% compounded semi-annually?
A department store has offered you a credit card that charges interest at 1.05% per month, compounded monthly. a. What is the nominal interest (annual percentage) rate for this credit card? b. What is the effective annual interest rate?
At 8% annual interest compounded quarterly, how long will it take to become a millionaire if you invest your money worth $120,000?
Rafael invested $2,000 in a business that yields an annual interest rate of 10% compounded continuously. How much would he get. approximately at the end of 5 years from his investment?
In how many years will money triple its amount if invested at 8 % compounded semi – annually?