A bank features a savings account that has an annual percentage rate of r = 2.9% with interest compounded semi-annually. Chris deposits $4,000 into the account. The account balance can be modeled by the exponential formula S(t) = P(1 + )", nt where S is the future value, P is the present value, r is the annual percentage rate, n is the number of times each year that the interest is compounded, and t is the time in years. (A) What values should be used for P, r, and n? P = r = n = (B) How much money will Chris have in the account in 9 years? Answer = $ Round answer to the nearest ny. = (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year). APY= Round answer to 3 decimal places.

A bank features a savings account that has an annual percentage rate of r = 2.9% with interest compounded semi-annually. Chris deposits $4,000 into the account. The account balance can be modeled by the exponential formula S(t) = P(1 + )", nt where S is the future value, P is the present value, r is the annual percentage rate, n is the number of times each year that the interest is compounded, and t is the time in years. (A) What values should be used for P, r, and n? P = r = n = (B) How much money will Chris have in the account in 9 years? Answer = $ Round answer to the nearest ny. = (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year). APY= Round answer to 3 decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Cash Flow is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. Part 2 The present value of a loan in which $1000 is to be paid out a year from today with the interest rate equal to 5% is $.(Round your response to the neareast two decimal place) Part 3 If a loan is paid after two years, and the amount $7000 is to be paid then with a corresponding 7%interest rate, the present value of the loan is $.(Round your response to the neareast two decimal place)
Cash Flow is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. Part 2 The present value of a loan in which $1000 is to be paid out a year from today with the interest rate equal to 5% is $. (Round your response to the neareast two decimal place) Part 3 If a loan is paid after two years, and the amount $7000 is to be paid then with a corresponding 7% interest rate, the present value of the loan is $. (Round your response to the neareast two decimal place)
An investor can invest money with a particular bank and earn a stated interest rate of 4.40%; however, interest will be compounded quarterly. What i are the nominal, periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate Periodic rate Effective annual rate Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 4%. But the bank is compounding bimonthly (every two months). What is the effective interest rate that Rahul would pay for the loan? ○ 3.945% 4.152% 4.067% 04.186 % Another bank is also offering favorable terms, so Rahul decides to take a loan of $12,000 from this bank. He signs the loan contract at 5% comanded daily for 12 months. Based on a 365-day year, what is the total amount that Rahul owes the bank at the end of the loan's term? (Hint: To calculate the number of days,…
Eng. economics. If $2000 is invested at 7% interest compounded continuously calculate its value after 3 years.
Investments Jack invests $1000 at a certain annual interest rate, and he invests another $2000 at an annual rate that is one-half percent higher. If he receives a total of $190 interest in I year, at what rate is the $1000 invested?
Interest can be computed more frequently than one time a year Select one: O True O False
How much money will you have in seven yearsif you deposit $7,000 in the bank at 8.5% interestcompounded daily?
Use Excel to calculate the total interest on a car loan paid monthly given the following values: Amount of loan = 13,824 Annual interest rate = 4.39% Length of loan = 5 years Round your answer to the nearest hundredth. Enter your answer as a positive number.
Suppose Crystal Wilson wants to accumulate $1,000,000 by the time she retires in 40 years. If she earns 10% on her investments, how much must she invest each year in order to realize her goal?
5. You receive payments of $10,000 per year from a family trust, but you don't need that money right now. Find FV Annuity: If you deposit your annual payments into an account earning 2% per year, what will be the account balance in 10 years? C= 10,000 r = 0.02 t = 10 (1 = i)^n FV = C =? Find FV Annuity: If you deposit your annual payments into an account earning 2% per year, what will be the account balance in 5 years?
Calculate the present value of an annuity with monthly deposits of $2,000 at 5% for 20 years. Discuss how the present value of an annuity will change if the deposit is doubled?
Find an expression for the present value of an annuity on which payments are 1 at the end of each 4-month period for 12 years assuming a rate of interest per 3-month period.