Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:What interest rate would be necessary for $6,550 investment to grow to $9,300 in an account
compounded continuously for 5 years?
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%
your & percentage rounded to be decimal place
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- Approximately what interest rate would be needed in order to grow and investment of $1400 to $2500 in 10 years if the interest was compound monthly? A 5.88% B ,5.84%arrow_forwardn amount of $5000 was invested with an annual interest rate of 5.5% compounded monthly. Answer the following and show all work: 2.a. What is the value of the investment after 20 years? 2.b.How much interest was earned? 2.c. What is the rate of return on the investment?arrow_forwardQ: Suppose you invest $210,000 in an annuity that returns constant annual payments over 6 years, with the first payment one year from now. At an interest rate of 7%, how much is the annual payment you receive? Equivalent problem structure (as a borrower): Suppose you borrow $210,000 to be paid back in constant annual payments over 6 years with the first payment one year from now. At an interest rate of 7%, how much is the annual payment? Please round your answer to the nearest hundredth Open Formula Summary in separate tab Open Glossary in separate tab Show navigation tips Carrow_forward
- Suppose you invested $1000 every 3 months over a 15 year period. If money earns an annual rate of 6.5% compounded quarterly, how much would be available at the end of the time period. How much is the interest earned? Show all your calculationsarrow_forwardYou are considering taking out a loan of $10,000.00 that will be paid back over 6 years with monthly payments of $158.74. If the interest rate is 4.5% compounded monthly, what would the unpaid balance be immediately after the sixth payment? What is the equity after the sixth payment? The unpaid balance would be $. (Round to 2 decimal places.) The equity would be $. (Round to 2 decimal places.) Tvm formulaarrow_forwardIf the current rate of interest is 5%, then the future value (FV) of an investment that pays $1,000 per year and lasts 15 years is closest to: A. $12,947 B. $25,895 C. $21,579 D. $30,211arrow_forward
- If you put $200,000 into your investment account now for 10 year at 5% annual interest, what is the difference in interest income between simple interest calculation and compound interest calculation? use Excel for calculation.arrow_forwardWhen an initial amount of P dollars is invested at r% annual interest compounded n times per year, the value of the account (4) after years is given by the equation nt A=P(1 + =)** n Write an equation that represents the value in an account that starts out with an initial investment of $5000 and pays 10% interest compound monthly. Then use that equation to fill the table and use the table to graph the equation. Years (1) Value (4) 0 5 10 15 20 oo → KIarrow_forwardImagine that you have $7,000 to invest for 9 years. How much more interest will you earn if you choose an account that pays 7% compounded annually (j1) instead of an account that pays a simple interest rate of 7% per annum? Round you answer to 2 decimal places. Your Answer: Answerarrow_forward
- Give typed solution only If you put $200,000 into your investment account now for 10 year at 5% annual interest, what is the difference in interest income between simple interest calculation and compound interest calculation?arrow_forwardWhat is the future equivalent of $1,000 invested at 6% simple interest per year for 3 years?arrow_forward4. If you deposit $1000 in one year, $2000 in two years, and $3000 in threeyears, how much will you have in three years? Assume a 7 percent annum interestrate.arrow_forward
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