Question

# 1). How much should be invested at 7% to have \$1300 at the end of 2.5...

1). How much should be invested at 7% to have \$1300 at the end of 2.5 years? (Round your final answer to two decimal places.)

2).Find the annual nominal rate for the effective rate given below.

Effective rate = 4.902%. Annual rate is compounded quarterly. (Round your final answer to one decimal place.)

3). Consider the following.

\$38,000 is invested at 5.5% compounded annually for 7 years. (Round your final answers to two decimal places.)

a. Find the final amount b. Find the total interest earned on the original investment.

1.We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

1300=P(1.07)^2.5

P=\$1300/1.07^2.5

=\$1300*0.844385089

=\$1097.70(Approx).

2.

EAR=(1+APR/m)^m-1
where m=compounding periods

0.04902=(1+APR/4)^4-1

(1+0.04902)^(1/4)=1+APR/4

Hence APR=[(1+0.04902)^(1/4)-1]*4

=4.8%(Approx).

3.

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=\$38000*(1.055)^7

=\$38000*1.454679161

\$55277.81(Approx)

Total interest earned on original investment=\$38000*5.5%*7 year

=\$14630.

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Need Online Homework Help?

Most questions answered within 1 hours.

##### Active Questions
• Av-Y6 Company operates three service departments, administration, maintenance, and personnel and two production departments, assembly and...
• Two long straight wires are parallel and 8.4 cm apart. They are to carry equal currents...
• You deposit \$5,000 into an account at the end of year 0. You deposit \$5,000 every...
• It's a Macroeconomics question. Kazumi is taking three courses this semester and wants to maximize her...
• Carver Corporation uses the FIFO method in its process costing system. The Assembly Department started the...
• The half-life of 235U, an alpha emitter, is 7.1×108 yr. Part A Calculate the number of...