You have a balance of $12,000 for your tuition on your American Express credit card. Assume that you make no more charges on the card. Also assume that American Express charges 15% APR andthat each month you make only the minimum payment of 5% of the balance. What percentage of the previous balance is paid off each month? Round the percentage to two decimal places.(Hint: Construct a formula for the balance after t minimum payments and simplify the decay factor in order to answer this question.)3.34× %Submit AnswerHomeMy AssignmentsRequest Extension

Minimum payment refers to the amount that remains at the end of each month for maintaining the…

Answered: You have a balance of $12,000 for your…

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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You can earn .47 percent per month at your bank. If you deposit $3,000, how long must you wait until your account has grown to $6,000? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Number of months
Suppose you borrow from a bank $1,756.06 today (t=0). You agree to pay back $3,637.64 in 4 years (t=4). The interest rate (%) that the bank charge you is closest to ________%. Input your answer without the % sign and round your answer to two decimal places.
Only type answer and give answer fast
You can earn .53 percent per month at your bank. If you deposit $3,600, how long must you wait until your account has grown to $6,600? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Number of months
For each case, provide the missing information. Assume payments occur at the end of each period. (Use the present value and future value tables, the formula method, financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places X.XXXXX. Round all final answers to the nearest cent, $X.XX, and round the loan maturity date to the nearest whole year.) (Click the icon to view the cases.) Future Value of $1 table Future Value of an Ordinary Annuity table Future Value of an Annuity Due table Cases Amount borrowed Interest rate Number of periodic payments per year Maturity (in years) Periodic payment (1) (a) 4% 4 10 $ 10,354.90 (2) $ 675,000 $ 4% 2 10 (b) S CO (3) 456,000 6 % 1 (c) 81.685.59 (4) $ 750.000 12 % T (d) I X
Write TRUE if the statement is true and FALSE if otherwise. 1. Compounding refers to the earning of interest on interest. 2. Discounting refers to the process of bringing the future back to the present. 3. The more frequently interest is compounded, the larger will be the final or terminal amount. 4. It takes longer than 8 years to retire a $24,000 loan at 8% if the annual payment is $3,000. 5. An annuity of $100 for 10 years is currently lessvaluable if interest rates are 10% instead of 12%. 6. If a person buys a stock for $10 and sells it after 10years for $20, the annual compound return is 10%. 7. Higher rates of interest are associated with greater present values. 8. If interest rates are 9 percent, an annuity of $100 for 10 years is to be preferred to $1,000 after 10 years. 9. If a bank pays 5 percent compounded semi-annually, the true rate of interest is less than 5 percent annually.
If you earn 5% per year on your bank account, how long will it take an account with $110 to double to $220? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
You can earn .53 percent per month at your bank. If you deposit $3,600, how long must you wait until your account has grown to $6,600? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Number of months
Assume that you have a balance of $4200 on your Discover credit card and that you make no more charges. Assume that Discover charges 25% APR and that each month you make only the minimum payment of 2.2% of the balance. What will the balance be after 10 years? (Enter your answer rounded to the nearest cent.)
You just bought a new TV for $2,559.72 on your credit card; assume no other purchases The APR is 18% and monthly payments. What is your monthly payment if you seek to pay off the balance at the end of 5 years from now? Round to the nearest whole number and use the $ symbol ($98 would be the form of a correct answer)
For TVM calculator: Write each known variable’s value as it appears in the calculator and use a question mark for the missing variable. Then, in the space provided write the missing variable’s value, as it appears in the calculator. Finally, write your final answer in context, with units, as a complete sentence. Donald is looking to invest in an account earning an interest rate of 1.75% compounded weekly and make weekly payments. If he wants $21,000 in 10 years, what do his payments need to be? N=520 I= 1.75 PV=? PMT=? FV= 21,000 P/Y=52 C/Y=52 Missing Variable Value __________________ Context Sentence:
You owe $2,500 in 5 months and $4,750 in 15 months. Your creditor has agreed to let you make one interest rate and a Focal Point Now. What single cash payment will make? single cash payment NOW using a 4% simple Round Each calculation to the nearest penny (even if zero), USE dollar signs, USE commas if and where needed I

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