Question

1. If $1,000 is deposited at the end of each month and earns 9% compounded monthly, will it take more than 42 months or less than 42 months for the total value of the deposits to reach a value of $50,000?

2. What is the approximate annual rate of interest will result in an investment doubling in value in eight years?

3. A $15,000 loan requires payments at the end of each month for five years. If the interest rate on the loan is 12% compounded monthly, calculate the size of each payment.

4.

Answer #1

1. fo find this, we have to use NPER function in EXCEL

=NPER(rate,pmt,pv,fv,type)

Here the interest is compounding monthly

rate=9%/12=0.75%

pmt=1000

pv=0

fv=50000

=NPER(0.75%,-1000,0,50000,0)

NPER= 42.62

It takes more than 42 months

2. Assume initial investment is $100. It has to be doubled to $200 in 8 years. the interest rate can be found using RATE function in EXCEL

=RATE(nper,pmt,pv,fv,type)

=RATE(8,0,-100,200,0)

RATE=9.05%

The annual interest rate=9.05%

3. this can be found using PMT function in EXCEL

=PMT(rate,nper,pv,fv,type)

here the payments are monthly

rate=12%/12=1%

nper=12*5=60

pv=-15000

fv=0

=PMT(1%,60,-15000,0,0)

PMT=$333.67

Each month payment=$333.67

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.

Compute the nominal annual rate of interest
(compounded monthly) at which $175.00 deposited at the end of each
month for eight years will amount to $30 000.00. Calculate to two
decimals. Enter as follows: 12.34% = 12.34

$600 is deposited at the beginning of each month in an account
that earns 4.8% interest, compounded monthly. How long will it take
until the value of the account is $150,000?

A person deposits $45 at the end of each month in an account
which earns 12.5% compounded monthly for 29 years. The person then
stops making the deposits, but allows the money to remain in the
bank earning the same interest for 15 more years.
a. Find the value of this account at the end of 44 years.
$
b. State the total amount of interest earned on this account.

A person deposits $275 at the end of each month in an account
which earns 9.5% compounded monthly for 29 years. The person then
stops making the deposits, but allows the money to remain in the
bank earning the same interest for 6 more years.
a. Find the value of this account at the end of 35 years.
$
b. State the total amount of interest earned on this account.
$

How long will $500,000, in an investment account that earns
3.25% compounded monthly, sustain month-end withdrawals of $3000?
(Do not round intermediate calculations and round up the
number of payments, n, to the next whole number.)
years and months.

Sophie deposited $1,300 at the end of every month into an RRSP
for 9 years. The interest rate earned was 4.50% compounded
semi-annually for the first 3 years and changed to 4.75% compounded
monthly for the next 6 years. What was the accumulated value of the
RRSP at the end of 9 years?
( Pls give me solution too ) thank you <3

Ali deposited $1,400 at the end of every month into an RRSP for
8 years. The interest rate earned was 4.75% compounded
semi-annually for the first 4 years and changed to 5.00% compounded
monthly for the next 4 years. What was the accumulated value of the
RRSP at the end of 8 years?

David deposited $500 at the end of every month into an RRSP for
8 years. The interest rate earned was 4.75% compounded
semi-annually for the first 2 years and changed to 5.00% compounded
monthly for the next 6 years. What was the accumulated value of the
RRSP at the end of 8 years?

If $8000 is deposited at the end of each half year in an account
that earns 6.7% compounded semiannually, how long will it be before
the account contains $130,000? (Round your answer to one decimal
place.)
Find the future value of an annuity due of $900 each quarter for
8 1/2 years at 11%, compounded quarterly
.

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