Question

Y is placed in an account which caries a nominal annual interest rate of 2.4% compounded quarterly for the first 10 years and a nominal annual discount rate of 3.6% convertible monthly for the next 5 years. The value of this account 15 years after inception is $10000. Find Y

Answer #1

Compounding | ||||||

A | P*(1+r)^n | |||||

Y | Principal | |||||

n | number of compunding | |||||

r | Rate of intrest for compunding period | |||||

A | Resulting amount at end | |||||

in given question | ||||||

A= 10000$ | ||||||

here two different interest rates and compunding factors are there | ||||||

we have to find out "p" | ||||||

year | computation | discounting factor | n | r | ||

`1-10 | 1/(1+0.006)^40 | 0.7871922 | `10*4=40 | `0.024/4=0.006 | Quarterly for 10 years | |

`11-15 | 1/(1+0.003)^60 | 0.8354953 | `5*12=60 | `0.036/12=0.003 | monthly for 5 years | |

Y | `=A/(1+r)^n | |||||

`10000/((1.006^40)*(1.003^60)) | ||||||

$6,576.95 |

Bethany deposits $1500 into an account today and then $1000 into
the account 10 years later. Assume that interest is credited to the
account at a nominal annual interest rate of i^(6), convertible
every two months, for the first 5 years, and at a nominal discount
rate of 10%, compounded quarterly, thereafter. The accumulated
balance in the fund after the 20 years is $10,000. Find i^(6)

Find the nominal annual rate of interest
a) at which $1500 will grow to $1800 in four years compounded
compounded monthly
b) at which money will double in seven years if compounded
quarterly

If a nominal interest rate compounded quarterly is 8%, what is
the annual effective discount rate?
SHOW FORMULAS AND GET THUMBS UP

1. If a bank advertises a savings account that pays a 6% nominal
interest rate compounded continuously, what is the effective annual
percentage rate?
2. Bank A offers a nominal annual interest rate of 5% compounded
daily, while Bank B offers continuous compounding at a 4.6% nominal
annual rate. If you deposit $3,000 with each bank, what will be the
difference in the two bank account balances after two years?
(Show ALL work and formulas used!)

5) What is the effective annual interest rate for a loan with a
nominal annual interest rate of 12% if compounded:
semi-annually. Answer ____________________
monthly. Answer _________________________
continuously. Answer _____________________
6) You make a series of quarterly deposits every quarter
starting at the end Quarter 1 and ending at the end of Quarter 36.
The first deposit is $1,100, and each deposit increases by $500
each Quarter. The nominal annual interest rate is 7%, and is
compounded continuously. What is...

Investment X for 100, 000 is invested at a nominal rate of
interest, j, convertible semiannually. After four years, it
accumulates to 214, 358.88.
Investment Y for 100, 000 is invested at a nominal rate of
discount, k, convertible quarterly. After two years, it accumulates
to 232, 305.73.
Investment Z for 100, 000 is invested at an annual effective rate
of interest equal to j in year one and an annual effective
effective rate of discount equal to k in...

What is the nominal annual rate of interest compounded quarterly
if a loan of $ 25,000 is repaid in seven years by payments of
$2000 made at the end of every six months?

Calculate the Nominal Interest Rate, the Interest Rate per
Compounding Period and the Effective Annual Interest Rate for the
following problems:
1. A Bank is offering a saving account at 3% compounded
monthly.
2. A Credit Card company says their card charges an APY of
8.5619% compounded quarterly.
3. Nomani wants to earn 0.25% per week.

You have an account with annual interest rate 6% compounded
monthly. You will deposit $120 at the end of each month for 10
years into this account, leave the account untouched for 5 years,
and then withdraw equal amounts at the end of each month for the
following 15 years, ending with a balance of $15,000. What will
your monthly withdrawals be?

What is the nominal annual rate of interest compounded monthly
on a lease valued at $23,700.00, if payments of $6200.00 are made
at the beginning of every six months for 2 years?
The nominal annual rate of interest is ____%.
(Round to two decimal places as needed.)

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