Question
In: Finance
Future value (with changing years). Dixie Bank offers a certificate of deposit with an option to...
Future value (with changing years).
Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $9 comma 500 for his CD investment. If the bank is offering a 3% interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a
a. two-year investment period?
b. five-year investment period?
c. eight-year investment period?
d. twenty-year investment period?
Solutions
Expert Solution
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jeff jeffy answered 1 year agoRelated Solutions
Future value (with changing years). Dixie Bank offers acertificate of deposit with an option to...
Future value (with changing years). Dixie Bank offers a
certificate of deposit with an option to select your own investment
period. Jonathan has $9,500 for his CD investment. If the bank is
offering a 3.5% interest rate, compounded annually, how much
will the CD be worth at maturity if Jonathan picks aa. three-year investment period?b. five-year investment period?c. ten-year investment period?d. fifteen-year investment period?
Casey has $4,000 to invest in a certificate of deposit. Her local bank offers her 6.19%...
Casey has $4,000 to invest in a certificate of deposit. Her
local bank offers her 6.19% on a 12-month FDIC-insured CD. A
nonfinancial institution offers her 6.84% on a 12-month CD. What
is the risk premium? What else must Casey consider in choosing
between the two CDs?
The risk premium is
Casey must also consider:
A. the bank's risk tolerance.
B. that if she needs access to the money in a short period of
time, the nonfinancial institution's CD might...
A) Bank A offers a 2-year certificate of deposit (CD) that pays 10 percent compounded annually....
A) Bank A offers a 2-year certificate of deposit (CD) that pays
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compounded semi-annually. The CDs have identical risk. What is the
APR that Bank B would have to offer to make its EAR equivalent to
the CD at Bank A?
The bank offers a certificate of deposit (CD) with a stated interest rate of 8.00% per year, compounded semi-annualy.
1. The bank offers a certificate of deposit (CD) with a stated
interest rate of 8.00% per year, compounded semi-annualy. While
another bank offers a CD with an interest rate of7.92% per year,
compounded monthly. Which CD should you invest in if you want to
maximize your effective annual rate (EAR)?2. An insurance company is offering a product called "retirement
insurance." the retirement insurance promises to pay you 20,000 per
year, with the first payment coming a year after your...
decided to invest in the Bank of America in a $ 10,000 certificate of deposit for...
decided to invest in the Bank of America in a $ 10,000
certificate of deposit for 5 years that pays an interest rate of
3.5% annually (simple interest). Suppose that the interest payment
is sent annually to your home by check and that this money is
taxable. When the certificate matures, he will receive his $ 10,000
back (non-taxable amount). Wesley's marginal tax rate is 24% and
headline inflation is expected to be 2% per year.
Determine for this investment...
Second Peoples National Bank offers a long-term certificate of deposit earning 6.13% compounded monthly. Your broker...
Second Peoples National Bank offers a long-term certificate of
deposit earning 6.13% compounded monthly. Your broker locates a
$20,000 zero-coupon bond rated AA by Standard & Poor's for
$8965 and maturing in 14 years. Which investment will give the
greater rate of return?
The Second Peoples National Bank offers a better rate of return.
The zero-coupon bond offers a better rate of return. MasterCard
statement shows a balance of $590 at 13.9% compounded monthly. What
monthly payment will pay off...
Wesley decided to invest in the Bank of America in a $ 10,000 certificate of deposit...
Wesley decided to invest in the Bank of America in a $
10,000 certificate of deposit for 5 years that pays an interest
rate of 3.5% annually (simple interest). Suppose that the interest
payment is sent annually to your home by check and that this money
is taxable. When the certificate matures, he will receive his $
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Determine for this...
What is the future value of a $1000/month deposit at the end of 5 years that...
What is the future value of a $1000/month deposit at the end of
5 years that grows at a rate of $50/month, starting with your
second deposit (which is $1,050). Assume that your initial deposit
occurs at the end of your first month. Use 9% nominal annual
interest compounded monthly.
What is the value of your LAST PAYMENT of a $1000/month deposit
at the end of 5 years that grows at a rate of $50/month, starting
with your second deposit...
Which of the following bank certificates of deposit (CD) will give you the highest future value...
Which of the following bank certificates of deposit (CD) will
give you the highest future value for a given investment over 3
years?
Group of answer choices:
A. A CD paying 3% nominal annual interest with
semi-annual compounding.
B. A CD paying 3.5% nominal annual interest
with daily compounding.
C. A CD paying 3.5% nominal annual interest
with quarterly compounding.
D. A CD paying 3% nominal annual interest with
annual compounding.
One bank advertises an interest rate on a certificate of deposit (CD) with a 5.6% effective...
One bank advertises an interest rate on a certificate of deposit
(CD) with a 5.6% effective annual rate. If $1000 were invested in
this CD today, what would be the future value in 5 years? Report
the answer to at least 4 significant figures.
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