Question

Suppose you deposited $5000 on January 1, 2014, in a savings
account paying 5% annual interest, with interest credited to the
account on December 31 of each year. On January 1, 2016, the annual
interest rate changes to 4.25%. What wil be the balance in your
account on January 1, 2030?

Answer #1

On January 1, 2014, Shannon Company completed the following
transactions (assume a 14 percent annual interest rate): (FV of $1,
PV of $1, FVA of $1, and PVA of $1) (Use the appropriate
factor(s) from the tables provided.)
a.
Bought a delivery truck and agreed to pay $55,000 at the end of
three years.
b.
Rented an office building and was given the option of paying
$11,600 at the end of each of the next three years or paying
$28,000...

1. Andrew and Emma Garfield invested $6,800 in a savings account
paying 5% annual interest when their daughter, Angela, was born.
They also deposited $1,500 on each of her birthdays until she was
14 (including her 14th birthday).
How much was in the savings account on her 14th birthday (after the
last deposit)? (Round answer to 2 decimal places, e.g.
25.25.)
2. Gleason Enterprises issued 8%, 6-year, $2,400,000 par value
bonds that pay interest semiannually on October 1 and April...

10. Suppose you invested $2,000 in a CD on January 1, 2016
maturing 5 years that pays interest of 4% per year compounded
monthly and credited at the end of each month. You don't withdraw
any money for the CD during the term.
(a.) How much money will be in the CD account on January 1,
2021?
(b.) What is the effective annual rate of interest on this
CD?

Mark deposits $1,700 into an account on January 1, 2005. The
account credits interest at an effective anual rate of 4.2% every
December 31. Mark withdraws $230 on January 1, 2007, deposits $120
on January 1, 2008, and withdraws $310 on January 1, 2010. What is
the balance in the account just after interest is credited on
December 31, 2011?

Suppose a savings account earns 3% interest compounded monthly.
After the first month $100.00 is deposited into the account. Each
subsequent month the deposit increases by 1%. Thus, in month 2,
$101.00 is deposited, and in month 3, $102.01 is deposited. Find
the account balance after 2 years if initially there is $400 in the
account.

Suppose you deposited $4,000 in a savings account earning 2.0%
interest compounding daily. How long will it take for the balance
to grow to $11,000? Answer in years rounded to two decimal places.
(e.g., 2.4315 years --> 2.43)
If the applicable discount rate is 5.0%, what is the present
value of the following stream of cash flows? Round to the nearest
cent.
Cash Flow Year 1: $1,000
Cash Flow Year 2: $5,000
Cash Flow Year 3: $6,000
You plan to...

Suppose that, in March 2018, you had deposited $1000 in a
savings account (and left it there until March of this year) and
the bank paid an interest rate of 2% on that savings. What nominal
interest rate did you earn? What real interest rate did you earn?
Was it a good decision on your part, why or why not?

Suppose you deposited $4,000 in a savings account earning 2.1%
interest compounding daily. How long will it take for the balance
to grow to $11,000? Answer in years rounded to two decimal
places.

If
$30,000 is deposited in a savings account at the end of each year
and the account pays interest of 5% compounded annually, what will
be the balance of the account at the end of 10 years?

1. Suppose you
deposited $13,000 in a savings account earning 2.7% interest
compounding daily. How long will it take for the balance to grow to
$26,000? Answer in years rounded to one decimal place.
2. What is the Profitability Index of a project that costs
$43,000 today and is expected to generate annual cash inflows of
$5,000 for the following 10 years. Assume the company's WACC is 8%.
Round to two decimal places.
3. What is the price of a...

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