Columbia Corporation deposited $2,000 in an account that pays 12% interest annually. If the interest is compounded continuously, how much money will be in the account at the end of 20 years? How to solve using financial calculator?
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Columbia Corporation deposited $2,000 in an account that pays 12% interest annually. If the interest is compounded continuously, how much money will be in the account at the end of 20 years?
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- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?A depositor currently has $6,000 and plans to invest it in an account that accrues interest continuously. What interest rate must the bank pay if the depositor needs to have $10,000 in four years?Suppose that you deposit $7000 in a savings account that pays 4% annual interest, with interest credited to the account at the end of each year. Assuming that no withdrawals are made, complete the following: a. Find the balance in the account after 5 years. b. Find the balance of the account after 9 years and 10 months.
- If 8000 dollars is invested in a bank account at an interest rate of 7 per cent per year, Find the amount in the bank after 15 years if interest is compounded annually: Find the amount in the bank after 15 years if interest is compounded quarterly: Find the amount in the bank after 15 years if interest is compounded monthly: Finally, find the amount in the bank after 15 years if interest is compounded continuously: Check AnswerSuppose that $12,000 is invested in a savings account paying 5.6% interest per year. (a) Write the formula for the amount in the account after t years if interest is compounded monthly. (b) Find the amount in the account after 3 years if interest is compounded daily. (c) How long will it take for the amount in the account to grow to $20,000 if interest is compounded continuously?Suppose that $10,000 is deposited into a saving account that earns 6% interest, compounded annually.a) Assuming that no additional deposits or withdrawals are made, use the appropriate compound interestfactors to determine how much the account will be worth:i) After 5 years;ii) After 20 years. b) Verify that your answers in part (a) are correct by constructing a table or spreadsheet that shows howthe initial deposit will grow each year over 20 years. At a minimum, your table or spreadsheet shouldinclude a row for each year and show: the amount of money in the savings account at the start of each year. the amount of interest earned each year; and the amount of money in the savings account at the end of each year, after interest is paid.Be sure to briefly explain how your table or spreadsheet verifies your results from part (a). c) Again assuming that no additional deposits or withdrawals are made, how many years will it take untilthere is at least $50,000 in the account?
- if you deposit $17,000 in the bank today, you will be able to withdraw $24,000 from the account in six years. what is the implied rate that the back is paying?You deposit $4,000 today in a bank that promises to pay an annual interest of 8%? What is future value of this sum at the end of 12 years? b. What if the bank pays 8% interest compounded monthly? What if the bank pays 8% interest compounded quarterly? What interest will the bank have to pay if the future value has to be $12,000 at the end of 12 years? d. Using information from (la) only, what quarterly compounded interest rate should the bank quote in order to provide the same interest as the 10% annual rate? What should be the quoted continuously compounded rate if it is to be the same as the 10% annual rate? Provide the rates per annum. What is the APR? Do we use APR or EAR when we are calculating the present а. с. е. value of an investment?Suppose you receive $100 at the end of each year for the next 3 years. a) if the interest rate is 8%, what is the present value of the cash flows? b) what is the future value in 3 years of the present value you compute in a? c) suppose you deposit the cash flows in a bank account that pays 8% interest in a year. What is the balance in the account at the end of each of the nest 3 years (after your deposit is made)? How does the final bank balance compare with your answer in b?
