Question

An investment promises to quadruple your money in nine years. If the interest is compounded monthly,...

An investment promises to quadruple your money in nine years. If the interest is compounded monthly, what effective annual rate would you earn? (Hint: Calculate the monthly rate and convert that to the effective annual rate, EAR.) A. 25.99% B. 16.65% C. 18.92% D. 21.90% E. 31.95% F. 41.42%

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.An investment will quadruple your money in 12 years. What is the nominal rate of interest...
1.An investment will quadruple your money in 12 years. What is the nominal rate of interest convertible quarterly? Answer = % (3 Sig Fig) 2.AJ takes out a small business loan of $15000 at a nominal rate of interest of 10.6% convertible quarterly. One year later, he repays $ 3500. Two years after that, the bank wants to sell AJ's loan to another institution. How much does AJ owe at that time? Answer =  dollars. (3 Sig Fig)
1. What nominal rate compounded annually would quadruple the principal in 4 years? 2. A master...
1. What nominal rate compounded annually would quadruple the principal in 4 years? 2. A master card compounds monthly and charges an interest of 1.5% per month. What is the effective interest rate per year? 3. How long will it take money to triple itself if invested at 8% compounded annually? 4. Microsoft CEO, billionaire Bill Gates willed that a sum of $25 million be given to a child but will be held in trust by the child’s mother until...
you are considering an investment that has a nominal annual interest rate of 7.88percent compounded semiannually...
you are considering an investment that has a nominal annual interest rate of 7.88percent compounded semiannually .therefore the effective annual rate or EAR (anual percentage yield)is....
.A risk-free investment promises to pay you $550 every 6 months for the next 11 years....
.A risk-free investment promises to pay you $550 every 6 months for the next 11 years. If you can earn 9.5% on your money, how much would you be willing to pay for this investment? You want to retire and have annual payments of $50,000 over a 20 year period. You plan to retire in 17 years. If you can earn 7.5% on your funds, how much do you need to invest monthly until you retire to reach your goal?...
1a) Lucy invested $950 five years ago. Her investment paid 7.2% interest compounded monthly. Lucy's twin...
1a) Lucy invested $950 five years ago. Her investment paid 7.2% interest compounded monthly. Lucy's twin sister Laurie invested $900 at the same time. But Laurie's investment earned 8% interest compounded quarterly. How much is each investment worth today? 1b) Carl is considering the purchase of an investment that will pay him $12,500 in 12 years. If Carl wants to earn a return equal to 7% per year (annual compounding), what is the minimum amount he should be willing to...
Compute the effective annual rate of interest a) for 6% compounded monthly b) at which $1100...
Compute the effective annual rate of interest a) for 6% compounded monthly b) at which $1100 will grow to $2000 in seven years if compounded monthly
Five years ago, you put $20,000 into an interest-earning account. The interest rate is compounded monthly....
Five years ago, you put $20,000 into an interest-earning account. The interest rate is compounded monthly. Today your deposit is worth $30,000. What is the effective annual interest earned on the account? please show how to solve using finance calculator.
For a deposit of ​$1027 at 6.4​% over 2 ​years, find the interest earned if interest...
For a deposit of ​$1027 at 6.4​% over 2 ​years, find the interest earned if interest is compounded​ semiannually, quarterly,​ monthly, daily, and continuously. The interest earned if interest is compounded semiannually is---- ​2   Find the present value of the following future amount. ​$2000 at 10​% compounded annually for 30 years The present value is----- 3 Suppose a savings and loan pays a nominal rate of 1.4​% on savings deposits. Find the effective annual yield if interest is compounded quarterly...
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an...
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? b) How much money do you have in your account today? c) If you wish to have $85,000 now,...
1) Consider a $126,714 35-year mortgage with an interest rate of 8% compounded monthly. a) Calculate...
1) Consider a $126,714 35-year mortgage with an interest rate of 8% compounded monthly. a) Calculate the monthly payment. b) How much of the principal is paid the first, 25th, and last year? c) How much interest is paid the first, 25th, and last year? d) What is the total amount of money paid during the 35 years? e)What is the total amount of interest paid during the 35 years? f) What is the unpaid balance after 25 years? g)How...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT