Michael Jones is investing $6,000 in a bank CD that pays a 10 percent annual interest....

Michael Jones is investing $6,000 in a bank CD that pays a 10 percent annual interest. How much will the CD be worth at the end of five years? (Do not round intermediate calculations and round your final answer to the nearest penny.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.)

Value of CD after 5 Years

Expert Solution

Solution:

Calculation of Value of CD after 5 years:

Value after 5 years=Amount Invested(1+Annual Interest)^no. of years

=$6,000(1+0.10)^5

=$6000*1.61051

=$9,663.06

jeff jeffy answered 2 years ago

One bank pays 5.5 percent annual interest, while a second bank pays 4.5 percent annual interest.

One bank pays 5.5 percent annual interest, while a second bank pays 4.5 percent annual interest. Determine how much longer it will take to accumulate at least $50 000 in the second bank account if you deposit $1000 initially and $1000 at the end of each year.

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 10 percent compounded annually. Bank B offers a 2-year CD that is 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?

A bank offers a CD that pays a simple interest rate of 9.5 %. How much...

A bank offers a CD that pays a simple interest rate of 9.5 %. How much must you put in this CD now in order to have $2500 for a home-entertainment center in 3 years. The present value that must be invested to get $2500 after 3 year to get an interest rate of 9.5% is?

Your bank offers a savings account that pays a stated (nominal) interest rate of 10 percent...

Your bank offers a savings account that pays a stated (nominal) interest rate of 10 percent per year, compounded semiannually. Requirement 1: If you deposit $15,000 today into this account and leave it invested for 5 years, how much will you have in the account at the end of Year 5? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Account Balance $ Requirement...

You are considering investing in a bank account that pays a nominal annual rate of 7%,

You are considering investing in a bank account that pays a nominal annual rate of 7%, compounded monthly. If you invest $3,000 at the end of each month, how many months will it take for your account to grow to $150,000?An uncle of yours who is about to retire wants to sell some of his stock and buy an annuity that will provide him with income of $50,000 per year for 30 years, beginning a year from today. The going...

Considering the choice between investing $50,000 in a conventional 1-year bank CD offering an interest rate...

Considering the choice between investing $50,000 in a conventional 1-year bank CD offering an interest rate of 5% and a 1-year “Inflation-Plus” CD offering 1.5% per year plus the rate of inflation. a. Which is the safer investment? a. Conventional 1-year bank CD b. 1-year “Inflation-Plus” CD b. Can you tell which offers the higher expected return? a. Expected rate of inflation b. Bank rate c. Cannot be determined c. If you expect the rate of inflation to be 3%...

South Central Bank pays 2.5 percent interest, compounded annually, on its savings accounts. Northern Bank pays...

South Central Bank pays 2.5 percent interest, compounded annually, on its savings accounts. Northern Bank pays 2.5 percent simple interest on its savings accounts. You want to deposit sufficient funds today so that you will have $1,500 in your account 2 years from today. The amount you must deposit today: will be greater if you invest with South Central Bank. is the same regardless of which bank you choose because they both pay the same rate of interest. is the...

Bank A offers loans with a 10 percent stated annual rate and a 10 percent compensating...

Bank A offers loans with a 10 percent stated annual rate and a 10 percent compensating balance. You wish to obtain $250,000 in a six-month loan. How much must you borrow to obtain $250,000 in usable funds? Assume you do not have any funds on deposit at the bank. What is the effective annual rate on a six-month loan? How much must you borrow to obtain $250,000 in usable funds if you currently have $10,000 on deposit at the bank?...

Assume that Juanita is indifferent between investing in a corporate bond that pays 11.20 percent interest...

Assume that Juanita is indifferent between investing in a corporate bond that pays 11.20 percent interest and a stock with no growth potential that pays a 7.70 percent dividend yield. Assume that the tax rate on dividends is 15 percent. What is Juanita's marginal tax rate?

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 10 percent annual interest....

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 10 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)...

Question