Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years?

Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

See similar textbooks

Similar questions

You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
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?
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? b) How much money do you have in your account today? c) If you wish to have $85,000 now, how much should you have invested 15 years ago?
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? b) How much money do you have in your account today?c) If you wish to have $85,000 now, how much should you have invested 15 years ago? Week 4 Giant Equipment Ltd. is considering two projects to invest next year. Both projects have the same start-up costs. Project A will produce annual cash flows of $42,000 at the beginning of each year for eight years. Project B will produce cash flows of $48,000 at the end of each year for seven years. The company requires a 12% return. Required: a) Which project should the company select and why?b) Which project should the company select if the interest rate is 14% at the cash flows…
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $2o,000 to that account. You earned 8%, compounded semi- annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? b) How much money do you have in your account today? c) If you wish to have $85,000 now, how much should you have invested 15 years ago?
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added anadditional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years,and 6.5%, compounded annually, for the last five years.Required:a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10years?
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? (2 marks) b) How much money do you have in your account today? (4 marks) c) If you wish to have $85,000 now, how much should you have invested 15 years ago? (4 marks)
Fifteen years ago deposited 12500 in to an investment fund.five years ago you added an additional $20000 to that account.you earn 8% compound semi annually for the first ten years,and 6.5% compound annually for the last five years. a)what is the effective interest rate(EAR) you would get for your investment in the first 10yeras? b)how much money do you have in your account today? c)if you wish to have $85000 now,how much should you have invested 15uears a go?