iJm makes a deposit of $13,100 in a bank account. The deposit is to earn interest compounded annually at the rate of 9 p
Posted: Fri Jul 01, 2022 7:46 am
iJm makes a deposit of $13,100 in a bank account. The deposit isto earn interest compounded annually at the rateof 9 percent for seven years.
Required:
a. How much will Jim have on deposit atthe end of seven years? (Hint: What is futurevalue?)
Note: Do not round intermediate calculations and roundyour final answer to the nearest whole dollar amount.
b. Assuming the deposit earned a 12percent rate of interest compounded quarterly, howmuch would he have at the end of seven years?
Note: Do not round intermediate calculations and roundyour final answer to the nearest whole dollar amount.
c1. What is the effective annualyield for alternative (a) where interest is compoundedannually? (Hint: Consider the future value of eachdeposit after one year only.)
Note: Do not round intermediate calculations and roundyour final answer to 2 decimal places.
c2. What is the effective annualyield for alternative (b) where interest is compoundedquarterly? (Hint: Consider the future value of eachdeposit after one year only.)
Note: Do not round intermediate calculations and roundyour final answer to 2 decimal places.
c3. Which alternative is better?
Required:
a. How much will Jim have on deposit atthe end of seven years? (Hint: What is futurevalue?)
Note: Do not round intermediate calculations and roundyour final answer to the nearest whole dollar amount.
b. Assuming the deposit earned a 12percent rate of interest compounded quarterly, howmuch would he have at the end of seven years?
Note: Do not round intermediate calculations and roundyour final answer to the nearest whole dollar amount.
c1. What is the effective annualyield for alternative (a) where interest is compoundedannually? (Hint: Consider the future value of eachdeposit after one year only.)
Note: Do not round intermediate calculations and roundyour final answer to 2 decimal places.
c2. What is the effective annualyield for alternative (b) where interest is compoundedquarterly? (Hint: Consider the future value of eachdeposit after one year only.)
Note: Do not round intermediate calculations and roundyour final answer to 2 decimal places.
c3. Which alternative is better?