Question

You have deposited $1,000 with an interest rate of 3% every 6 months where the interest...

You have deposited $1,000 with an interest rate of 3% every 6 months where the interest is computed every 6 months How much you will have after 5 years?



Two years later after the initial deposit of the money, you deposited additional $1,000 with an interest rate of 2% every 6 months (applies only to this deposit). How much will you have after 5 years?

Homework Answers

Answer #1

Ans: in first case: Principal (P) = $1000 rate of interest (r) = 3% every 6 months

Total no of periods (n) = 5 * 2 = 10 periods

Amount at the end of 5 years = P(1+r)n

= 1000(1+0.03)10

= $1343.91

After two years we deposited $1000 which means $1000 is invested for 3 years. So principal = $1000

rate of interest = 2% Total no of periods = 2*3 = 6 periods

Amount at the end of 3 years = P(1+r)n

= 1000 (1+0.02)6

= $1126.16

Thus total amount at the end of 5 years isthe sumof $1000 invested for 5 years and additional $1000 invested for 3 years which is equal to $1343.91 + $1126.16 = $2470.07

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How much money would have to be deposited every quarter, beginning 3 months from now, if...
How much money would have to be deposited every quarter, beginning 3 months from now, if a company wanted to have $75,000 at the end of 3 years? Assume the interest rate is 11% per year, compounded annually. Draw cash flow diagram
Using the formula, determine how much money you would have if you put 1,000 in the...
Using the formula, determine how much money you would have if you put 1,000 in the bank at an interest rate of 7% and kept it there for 5 years. Answer Using the formula, determine how much money you need to put into the bank to have $1,500 in 4 years if the interest rate is 5%. Answer Using the calculator answer the following questions. How much money would you have in the bank if you deposited $50 at an...
You have deposited $10,000 in a bank earning interest at 7% p.a. compounded quarterly for four...
You have deposited $10,000 in a bank earning interest at 7% p.a. compounded quarterly for four years and five months. At that time, the interest rate changes to 6% p.a. compounded monthly. What is the value of the deposit three years after the change in the rate of interest? What nominal annual rate compounded quarterly is equivalent to 7.5% p.a. compounded monthly? You have decided to deposit $500 in the Montreal bank at the end of each quarter for seven...
Suppose you deposit $1,000. The interest rate is 5%. How much will you have two years...
Suppose you deposit $1,000. The interest rate is 5%. How much will you have two years from now? What is the effect of compounding?
You have deposited $10,000 in a bank earning interest at 7% p.a. compounded quarterly for four...
You have deposited $10,000 in a bank earning interest at 7% p.a. compounded quarterly for four years and five months. At that time, the interest rate changes to 6% p.a. compounded monthly. What is the value of the deposit three years after the change in the rate of interest?
Every 6 months for 5 years, a father deposits $3000 in a trust company for his...
Every 6 months for 5 years, a father deposits $3000 in a trust company for his daughter’s education. If the money earns at 16% compounded semi-annually, how much will be in the fund after the 7th deposit? After the last deposit?
You plan to make five deposits of $1,000 each, one every 6 months, with the first...
You plan to make five deposits of $1,000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 7% nominal interest, compounded semiannually, how much will be in your account after 3 years? Round your answer to the nearest cent. $   One year from today you must make a payment of $11,000. To prepare for this payment, you plan to make two equal quarterly deposits...
You plan to make a total of 5 deposits of $100 each, one every 6 months,...
You plan to make a total of 5 deposits of $100 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 12% but uses semiannual compounding. You plan to leave the money in the bank for 10 years. How much will be in your account after 10 years?
You have been accepted at University. You will need $15,000 every six months (beginning six months...
You have been accepted at University. You will need $15,000 every six months (beginning six months from now) for the next three years to cover tuition and living expenses. Mom and Dad have agreed to pay for your education. They want to make one deposit now in a bank account earning 6% interest, compounded semiannually, so that you can withdraw $15,000 every six months for the next three years. How much must they deposit now?
You plan to make five deposits of $1,000 each, one every 6 months, with the first...
You plan to make five deposits of $1,000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 7% nominal interest, compounded semiannually, how much will be in your account after 3 years? Do not round intermediate calculations. Round your answer to the nearest cent.   One year from today you must make a payment of $6,000. To prepare for this payment, you plan to make...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT