Question
In: Finance
Consider a bank account where you make deposits of $100 at year 1, $200 at year...
Consider a bank account where you make deposits of $100 at year 1, $200 at year 5, and $200 at year 9. You do not remember the offered compound interest rate, but you know that the balance of your account right after the deposit at year 9 was twice the balance right after the deposit at year 5. Find the first time (in years) that the balance on your account reaches $1,000
Solutions
jeff jeffy answered 2 years agoRelated Solutions
1. James deposits $200 in a bank account on the last day of each month. He...
1. James deposits $200 in a bank account on the last day of each
month. He increases the deposit by $10 each month. The payments
continue for a period of 36 months.
What is the present value of these payments on the day of the
first payment (to the nearest dollar)? The nominal interest rate is
8% compounded monthly.
2. $1000 accumulates to $1500 in 5 years time and the rate of
inflation is 3% p.a.
What is the annual...
You plan to make 15 deposits at the end of each year in an account that...
You plan to make 15 deposits at the end of each year in an
account that pays 6% compound interest annually. If the first
deposit is $ 1,000 and subsequently 500 are added each year to the
amount deposited the previous year (1000, 1500, ...), the amount of
the account at the end of the 15 years will be close to:
a. $71,550
b. $97,777
c. $92,242
d. $87,021
e.No correct answer is provided.
A company is planning to make equal quarterly deposits into a bank account. They want their...
A company is planning to make equal quarterly deposits into a
bank account. They want their
account to have 1.5 million dollars after 5 years from now because
they want to buy a certain
machine. Note that the first quarterly deposit is made today and
the last deposit is made at
the end of year 5.
A) If the bank’s interest rate is 14% per year compounded monthly,
how much should the
company deposit each quarter? (12.5 points)
B) If...
You plan to make two deposits to your bank account - one deposit today for $X...
You plan to make two deposits to your bank account - one deposit
today for $X and one deposit in four years for $3X. You would like
to withdraw $20,000 from this bank account in 6 years, and another
$10,000 in 12 years. You can earn an effective rate of 5% per year.
What is $X?
You want to have enough money in the bank to pay for your
daughter’s education when the time comes. You expect to make 4...
Consider the following scenario: You plan to make quarterly deposits into a savings account that earns...
Consider the following scenario: You plan to make quarterly
deposits into a savings account that earns 10% interest compounded
continuously. You plan to make the first deposit of $500 at the end
of the first quarter and increase the deposit by $100 each
subsequent quarter. Which of the following best represents the
future value of this scenario at the end of the 7th year?
You plan to make monthly deposits of $1,000 into an account at the beginning of each...
You plan to make monthly deposits of $1,000
into an account at the beginning of each month for
the next 12 years. If you can earn 3.0% interest, what will your
final balance be by the end of 12 years? Round to the nearest cent.
[Hint: Beginning of period monthly cash flows!]
You plan to make monthly deposits of $1,000 into an account at the beginning of each...
You plan to make monthly deposits of $1,000 into an account at
the beginning of each month for the next 11 years. If you can earn
3.4% interest, what will your final balance be by the end of 11
years? Round to the nearest cent. [Hint: Beginning of period
monthly cash flows!]
You make deposits at the end of each month into an account earning interest at a...
You make deposits at the end of each month into an account
earning interest at a rate of 6%/year compounded monthly. Your
deposits will be $2000/month in the first year, $2200/month in the
second year, $2420/month in the third year, $2662 in the fourth
year, and so on. How much will be in your account at the end of 40
years? No Excel answers please.
TD Bank starts with $200 in bank capital. It then accepts $800 in deposits. It keeps...
TD Bank starts with $200 in bank capital. It then accepts $800
in deposits. It keeps 12.5% of deposits in reserves. It uses the
rest of its assets to make bank loans.
Show the balance sheet of TD Bank. You may type directly
into the following T account.
TD Bank
Assets
Liabilities
What is TD Bank’s leverage ratio.
Suppose that 20 percent of the borrowers from TD Bank default
and these bank loans become worthless. Show the bank’s...
Someone deposits $200 every 6 months into an account that pays interest at 4% per year...
Someone deposits $200 every 6 months into an account that pays
interest at 4% per year compounded quarterly. How much does this
person have after 10 years?
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