Question

Cathy wants to have $23,000 in cash 4 years from now in order to
pay for improvements that must be made to her small office at that
time. If Cathy finds a savings account that pays annual interest of
4.4% compounded monthly, then how much should she invest right now
in the account in order to have the funds in 4 years? (Round your
answer to the nearest cent.)

$

Second National Bank offers an account that earns 5.33% per
year, compounded continuously. If a person invests $15,000 in this
account, what will be the value of the account at the end of 10
years? (Round your answer to the nearest cent.)

$

Answer #1

The Pirerras are planning to go to Europe 4 years from now and
have agreed to set aside $170/month for their trip. If they deposit
this money at the end of each month into a savings account paying
interest at the rate of 2%/year compounded monthly, how much money
will be in their travel fund at the end of the fourth year? (Round
your answer to the nearest cent.)
$

A student wants to have $40,000 when he graduates 4 years from
now. His grandfather gave him a gift of $15,000. How much must he
save each year (to the nearest dollar) if he deposits the $15,000
today and can earn 11% on both the $15,000 and his savings?
A.
$ 3858
B.
$ 3658
C.
$ 3558
D.
$ 3758

Twins graduate from college together and start their careers.
Twin 1 invests $2000 at the end of each year for 10 years only
(until age 30) in an account that earns 7%, compounded annually.
Suppose that twin 2 waits until turning 40 to begin investing. How
much must twin 2 put aside at the end of each year for the next 25
years in an account that earns 7% compounded annually in order to
have the same amount as twin...

How much would you need to deposit in an account now in order to
have $4000 in the account in 10 years? Assume the account earns 2%
interest compounded monthly.

A young couple wants to have a college fund that will pay
$20,000 at the end of each half-year for 8 years.
(a) If they can invest at 8%, compounded semiannually, how much
do they need to invest at the end of each 6-month period for the
next 18 years to begin making their college withdrawals 6 months
after their last investment? (Round your answer to the nearest
cent.)
a. Suppose 8 years after beginning the annuity payments, they
receive...

A young couple wants to have a college fund that will pay
$40,000 at the end of each half-year for 8 years. (a) If they can
invest at 8%, compounded semiannually, how much do they need to
invest at the end of each 6-month period for the next 18 years to
begin making their college withdrawals 6 months after their last
investment? (Round your answer to the nearest cent.) $ (b) Suppose
8 years after beginning the annuity payments, they...

Al Derover wants to buy a used vehicle in five years. He
estimates the cost will be $12,000. If he invests $8,500 now at a
rate of 10% compounded semiannually, how much will he have? Will he
have enough money to buy the vehicle at the end of five years?
(Round your answer to the nearest cent.)

How much will Fortnite Corp. have to invest every 4 weeks,
beginning 2 years from now, to accumulate $2,700,000 in 15 years if
it deposits $25,000 today into a fund that pays a return of 9.45%
compounded continuously? Assume 52 weeks in a year.
a.) $7,904 b.) $7,841 c.) $8,465 d.) $8,402 e.) $8,340 f.)
$7,966

5A-1
FV CONTINUOUS COMPOUNDING If you receive $15,000 today and can
invest it at a 6% annual rate compounded continuously, what will be
your ending value after 15 years?
5A-2
PV CONTINUOUS COMPOUNDING In 7 years, you are scheduled to
receive money from a trust established for you by your
grandparents. When the trust matures there will be $200,000 in the
account. If the account earns 9% compounded continuously, how much
is in the account today?
5A-3
FV CONTINUOUS COMPOUNDING...

When interest is compounded continuously, the amount of money
increases at a rate proportional to the amount S present
at time t, that is,
dS/dt =
rS,
where r is the annual rate of interest.
(a)
Find the amount of money accrued at the end of 8 years when
$5000 is deposited in a savings account drawing 5
3
4
% annual interest compounded continuously. (Round your answer to
the nearest cent.)
$
(b)
In how many years will the...

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