You wish to deposit $1000 into an investment account that pays 4% for 125 years. What...

You wish to deposit $1000 into an investment account that pays 4% for 125 years. What is the difference between an account that is compounded daily and an account that is continuously compounded.

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

You deposit $1000 in an account that pays 8% interest compounded semiannually. After 5 years, the...

You deposit $1000 in an account that pays 8% interest compounded semiannually. After 5 years, the interest rate is increased to 8.12% compounded quarterly. What will be the value of the account after a total of 10 years?

You deposit $1000 per month every month into an investment account for 40 years. The deposits...

You deposit $1000 per month every month into an investment account for 40 years. The deposits are made at the end of each month . The first deposit is made at the end of the first month. If the return 6 percent compounded monthly for the first 10 years, and 9 percent compounded monthly thereafter, how much will you have in the account in year 40?

I deposit $1000 a month in an account paying 4.23% for 15 years. You deposit $350...

I deposit $1000 a month in an account paying 4.23% for 15 years. You deposit $350 a month in an account with the same yield for 30 years. How much will be in each account? How much total interest will each account produce?

If you deposit $500 per month into an investment account that pays interest at a rate...

If you deposit $500 per month into an investment account that pays interest at a rate of 8% per month, compounded quarterly, how much will be in the account at the end of 5 years? There is no interperiod compounding. (for full credit show cash flow diagram) (25 points)

Assume that 1 year from now you plan to deposit $1000 in savings account that pays...

Assume that 1 year from now you plan to deposit $1000 in savings account that pays a nominal rate of 8 %. a) If the bank compounds interest annually, how much will you have in your account 4 years from now? b) What would your balance be 4 years from now if the bank used quarterly compounding rather than annual compounding?

You deposit $1,500 into an account that pays 4% per year. Your plan is to withdraw...

You deposit $1,500 into an account that pays 4% per year. Your plan is to withdraw this amount at the end of 5 years to use for a down payment on a new car. How much will you be able to withdraw at the end of 5 years? Do not round intermediate calculations. Round your answer to the nearest cent.

If you wish to have $800 in a savings account at the end of 4 years,...

If you wish to have $800 in a savings account at the end of 4 years, and 5% interest will be paid annually, how much should you put into the savings account now?

You deposit $15,700 into an account this morning. The account pays interest at a rate of...

You deposit $15,700 into an account this morning. The account pays interest at a rate of 7.1 percent per year. How much will be in your account 16 years from today? Group of answer choices $54,911.19 $33,535.20 $61,603.83 $51,818.31 $47,046.92 Sixty years ago, your mother invested $7,200. Today, that investment is worth $379,250.53. What is the average annual rate of return she earned on this investment? Group of answer choices 6.83 percent 7.90 percent 5.92 percent 4.77 percent

You put $8,000 in an account earning 5%. After 4 years you make another deposit into...

You put $8,000 in an account earning 5%. After 4 years you make another deposit into the same account. Three years later (that is, 7 years after your original deposit), the account balance is $20,000. What was the amount of the deposit at the end of year 4?

Suppose there are only 2 investment alternatives: a bank deposit that pays 4% per year and...

Suppose there are only 2 investment alternatives: a bank deposit that pays 4% per year and a 2-year coupon bond with 5% annual coupon rate and face value of $1,000. Assume the bank deposit and coupon bond are perfect substitutes. a) What is the market price of the bond at beginning of year 1? And year 2? b) Assume now that at the beginning of year 2, the deposit interest rate unexpectedly increases to 6% annual. What is the market...

Subjects