Julie deposited 10,000 in each of Bank 1 and Bank 2. Bank 1 credits simple interest at an annual rate of 10% for the first five years and 5% thereafter. Bank 2 credits interest at an annual nominal rate of 4% compounded quarterly. The interest credited in the eighth year by Bank 2 exceeds the interest credited in the eighth year by Bank 1 by ?. Calculate the absolute value of ?.

Julie deposited 10,000 in each of Bank 1 and Bank 2. Bank 1 credits simple interest at an annual rate of 10% for the first five years and 5% thereafter. Bank 2 credits interest at an annual nominal rate of 4% compounded quarterly. The interest credited in the eighth year by Bank 2 exceeds the interest credited in the eighth year by Bank 1 by ?. Calculate the absolute value of ?.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 26P

See similar textbooks

Similar questions

Keith deposits 10,000 into a bank account at time 0. The bank credits interest at an annual nominal interest rate of ?, compounded semi-annually. The total amount of interest credited in the twelfth year is twice the amount of interest credited in the fourth year.Calculate i
Aura deposits $10.00 in a bank and fifteen years later deposits $20.00. The interest is credited at a nominal discount rate compounded quarterly for the first 10 years, and at a nominal interest rate of 6% compounded semi - annually thereafter. The accumulated amount in the bank at the end of 30 years is S 100.00. Calculate 'd'.
Halep Inc. borrowed $34,059 from Davis Bank and signed a 2-year note payable stating the interest rate was 8% compounded annually. Using the Present Value of an Annuity of 1 TABLE4, calculate the factor. Next, determine the annual payment amount. Then, determine the interest portion of the payment for year 1. Finally, determine the principal portion of the payment for year 1. Round to the nearest penny, two decimal places.
An investor deposits $500 into each of three accounts. The first account earns simple interest at an annual rate of 6%. The second account earns compound interest at an effective annual rate of 5.5%. The third account earns a nominal annual interest rate of 5% compounded quarterly. Find the sum of the balances from the three accounts after 4 years.
Can you please help me work out this problem in detail? Minnie Rose deposited $15,000 in Street Bank at 4% interest compounded quarterly. What was the balance on Minnie’s account at the end of year 1? What was the interest earned on this account? What was the effective rate (APY)? Round your answer to the nearest hundredth of a percent.
A woman deposited $ 10,000 into her bank account. The money remained in the account for 10 years. For the first 5 years the monthly compound traded an annual nominal interest of 9%. This after the period, the bank changed its interest policy and traded a compound annual nominal interest of 12% for the quarter. Money accumulated in the account at the end of 10 years calculate.
A.Halep Inc. borrowed $17,128 from Davis Bank and signed a 2-year note payable stating the interest rate was 4% compounded annually. Using the Present Value of an Annuity of 1 TABLE4, calculate the factor. Next, determine the annual payment amount. Round to the nearest penny, two decimal places. B.Halep Inc. borrowed $34,243 from Davis Bank and signed a 5-year note payable stating the interest rate was 3% compounded annually. Using the Present Value of an Annuity of 1 TABLE4, what is the factor?
You deposit $1,000 in the bank at an annual interest rate of 8%. Interest is compounded once per year. In one year's time you have $ ------ In two year's time you have $ ------- Enter numbers rounded to two decimal places as necessary.
Halep Inc. borrowed $39,070 from Davis Bank and signed a 1-year note payable stating the interest rate was 8% compounded annually. 1. Using the Present Value of an Annuity of 1 TABLE4 or Figure B2 in the textbook E, calculate the factor. 2. Next, determine the annual payment amount. 3. Then, determine the interest portion of the payment for year 1. 4. Finally, determine the principal portion of the payment for year 1. Round to the nearest penny, two decimal places.
3. Scott deposits 80 today into an account that credits a nominal interest rate of 6% compounded quarterly. pe Roberta deposits X today into an account that credits a nominal discount rate of 4% compounded semi-annually (twice per year). After 18 years, the balance in Scott's account is equal to the balance in Roberta's account. Determine X.
acobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank onApril 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.
Q1) A man deposited $10,000 in a bank saving account that pays X % / year compounded monthly. He withdraw his money in five equal ends of year withdrawals starting at the end of the first year. Each withdrawal equals $3,000. Determine: 1) Effective Interest Rate per year (i) 2) Nominal Interest Rate per year (X) 3) Effective interest rate per month 4) Effective interest rate per six months