Zana has a money market account that earns 1.2% interest. She wants to purchase a matched...

Zana has a money market account that earns 1.2% interest. She wants to purchase a matched pair of French Bull Dogs for $3,600. How much must she set aside (invest) monthly so that she can buy them in two years?

If you deposit $2,000 at the end of each of the next 18 years into an account paying 4.2% interest, how much money will you have in the account when you retire?

You invest in annuity paying $4,000 a year, to receive $250,000 in twenty years. What rate of return will you have earned?

Expert Solution

jeff jeffy answered 1 year ago

14. A(n) ____ is not an interest-bearing account. a. money market mutual fund b. money market...

14. A(n) ____ is not an interest-bearing account. a. money market mutual fund b. money market deposit account c. NOW account d. asset management account e. regular checking account 15. Commercial banks are insured by the a. Financial Deposit Insurance Association. b. Federal Depositors Assurance Corporation. c. Federal Deposit Insurance Corporation. d. Financial Deposit Insurance Company. e. Federal Demand Deposit Corporation. 16. ____ is a benefit of using credit. a. The ability to buy expensive goods while spreading the payments...

Everything else held constant, an account that earns compound interest will grow more quickly than an otherwise identical account that earns simple interest.

3. Future value The principal of the time value of money is probably the single most important concept in financial management. One of the most frequently encountered applications involves the calculation of a future value. The process for converting present values into future values is called _______ . This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables? The duration of the investment (N) The inflation rate indicating the change in...

Leslie is saving to purchase a Ferrari. She has no money to invest now, but will...

Leslie is saving to purchase a Ferrari. She has no money to invest now, but will invest $3,200 each year for 15 years. By the end of the 15 years she will have her business established and will be able to make payments of $1,000 into the account each month. Finally she will let the money sit for ten years without making any payments and it will grow to $1,000,000, at which time Leslie can purchase the Ferrari of her...

Rita wants to be involved in business. She has a fair amount of money to invest,...

Rita wants to be involved in business. She has a fair amount of money to invest, but she does not want to be involved in management. She wants to form a business in the quickest way possible under her circumstances. Which form of business would be best for Rita? Corporation Limited partnership Sole proprietorship LLC Hal and Miranda have a general partnership business for landscaping projects. Hal makes a contract with a customer for a project one day while Miranda...

Katarina puts money into an account. One year later she sees that she has 6 percent...

Katarina puts money into an account. One year later she sees that she has 6 percent more dollars and that her money will buy 4 percent more goods. The nominal interest rate was a. 10 percent and the inflation rate was 6 percent. b. 6 percent and the inflation rate was 2 percent. c.4 percent and the inflation rate was 2 percent. d. 10 percent and the inflation rate was 4 percent.

Maribel Salazar has a stock broker account at Diversified Investors Group on which she earns 4.5%...

Maribel Salazar has a stock broker account at Diversified Investors Group on which she earns 4.5% interest annually. She buys a car with a loan. The interest rate on the loan is 16.5%, but she doesn't have to make any payments during the first year. Then she will make monthly payments until the loan is paid off. Today, Maribel has: a stock broker account with $11,000, which earns 4.5% interest annually $8000 in car loan debt, with no payments the...

Bank A pays 15% interest, compounded monthly, on its money market account. What is the effective...

Bank A pays 15% interest, compounded monthly, on its money market account. What is the effective annual rate?

Suppose you open today (year 0) a savings account with $5,000; the account earns an interest...

Suppose you open today (year 0) a savings account with $5,000; the account earns an interest of 3% APR annually. At the end of year 2 you deposit an additional $5,000 in the savings account, and then at the end of year 7 you deposit another $5,000 in the account. There is a total of 3 deposits made so far. If you did not make any withdrawals or additional deposits, then approximately what is the balance (FV) in the account...

Mr. Jones now has a $100,000 balance in a bank account which earns 7% annual interest....

Mr. Jones now has a $100,000 balance in a bank account which earns 7% annual interest. One year from now, he will withdraw 10% of the total amount in the account and reinvest that amount withdrawn in a different account earning 12% at a second bank. He repeats this procedure each year thereafter, transferring 10% of his account at the first bank to the second bank. After 40 years from now, how much does he have at each bank? (Hint:...

If you deposit $82,000 in an interest bearing account that earns you 2.9% annual interest (compounded...

If you deposit $82,000 in an interest bearing account that earns you 2.9% annual interest (compounded annually) in the first 4 years, 2.1% annual interest (compounded annually) for the next 4 years and 7.7% annual interest (compounded annually) for the following 4 years, how much money will you have at the after these 3 interest periods?

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