5. Assume you deposit RM1,000 into a savings account every three months that compounds interest semiannually. a. Determine the payment period (PP) and compounding periods (CP) b. State the payment period greater than or less than the compounding period.
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- Direction: Compute the annual interest, total interest, and amount to be received or paid at the end of the term for the scenario below using a simple interest assumption and compound interest assumption. You deposited ₱5,000 from the savings of your daily allowance in a time deposit account with your savings bank at a rate of 1.5% per annum. This will mature in 6 months.2. Deposit the principal amount of P10,000 into a savings account that pays interest at the rate of 5%. What is the amount in the account after 1 year if the account is: a. compounded annually b. compounded semi-annually c. compounded quarterly d. compounded monthly e. Which is advantageous to the investor?a) You have a bank account that earns 6.8% interest rate. How much must you deposit (prinicipal) in order to have $4279 in your bank in 11 months? b) What is the interest rate?
- b) If the same two $15,000 deposits are made (at time 0 and end of year 4) into a different account that earns a nominal annual interest rate of 8.4% compounded quarterly, in which account should the money be deposited in order to earn more interest?Suppose you deposit m dollars the beginning of every month in a savings account that earns a monthly interest rate of r. For an initial investment of m dollars, the amount of money in your account at the beginning of the second month is the sum of your second deposit and your initial deposit plus interest. Denote by An the amount of money in your account in the nth month. 1. Explain why A₁ = m dollars. 2. Explain why A₂ = m+m(1+r) dollars. 3. Write down explicit expressions for A3 and A4. This is the crucial step. 4. Explain why An = m+m(1 + r) + m(1 + r)² + ... +m(1 + r)"−¹ dollars. 5. Use the formula for a geometric sum to show that An = m (1 + r)” − 1 r dollars. 6. If your account has a monthly interest rate r = 0.002 and you deposit $200 monthly for 5 years, how much money will you have in your account after the 5 years? (Hint: How many months?)a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate Time Financial Goal $? at the end of each year 3% compounded annually 18 years $140,000 a.The periodic deposit is $_______. (Do not round until the final answer. Then round up to the nearest dollar asneeded.)
- You deposited P5,000 from the savings of your daily allowance in a time deposit account with your savings bank at a rate of 1.5% per annum. This will mature in 6 months. Compute the annual interest, total interest, and amount to be received or paid at the end of the term for this scenario above using a simple interest assumption and compound interest assumption.Suppose that on January 1 you have a balance of $6200 on a credit card whose APR is 18%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1 a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? C... a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)Calculate the amount of money that will be in each of the following accounts at the end of the given deposit period: Account Holder Amount Deposited AnnualInterest Rate CompoundingPeriods Per Year (M) CompoundingPeriods (Years)Theodore Logan III $1,000 10% 1 10Vernell Coles $95,000 12% 12 1Tina Elliot $8,000 12% 6 2Wayne Robinson $120,000 8% 4 2Eunice Chung $30,000 10% 2 4Kelly Cravens $15,000 12% 3 3
- 1. Suppose that on January 1 you have a balance of $5600 on a credit card whose APR is 17%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? a. The monthly payment is? Then round to the nearest cent as needed.) 2. Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 8%. Option 2: a 15-year loan at an APR of 7.5%. Question content area bottom Part 1 Find the monthly payment for each option. The monthly payment for option 1 is $enter your response here. The monthly payment for option 2 is $enter your response here. (Do not round…Suppose that on January 1 you have a balance of $3100 on a credit card whose APR is 17%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1 a. Calculate your monthly payments.b. When the card is paid off, how much will you have paid since January 1?c. What percentage of your total payment from part (b) is interest?Consider a credit card with a balance of $7000. You wish to pay off the credit card in each scenario. Calculate the following. Round your answer to the nearest cent, if necessary.a. The amount of a monthly payment within the time frame givenb. The total amount paid over the time period12. APR of 17.99% paid off within 1 year APR of 24% paid off within 3 years