Question
In: Accounting
You have found three investment choices for a one-year deposit 11.7 % APR compounded monthly, 11.7 % APR compounded annually, and 10 8% APR compounded daily
You have found three investment choices for a one-year deposit 11.7 % APR compounded monthly, 11.7 % APR compounded annually, and 10 8% APR compounded daily. Compute the EAR for each investment choice (Assume that there are 365 days in the year) (Note Be careful not to round any intermediate steps less than six decimal places)
The EAR for the first investment choice is% (Round to three decimal places)
The EAR for the second investment choice is % (Round to three decimal places)
The EAR for the third investment choice is % ( Round to three decimal places)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
You have found three investment choices for a one-year deposit: 11.8 % APR compounded monthly, 11.8...
You have found three investment choices for a one-year deposit:
11.8 % APR compounded monthly, 11.8 % APR compounded annually,
and 11.2 % APR compounded daily. Compute the EAR for each
investment choice. (Assume that there are 365 days in the year.)
(Note: Be careful not to round any intermediate steps less than
six decimal places.)
The EAR for the first investment choice is %.
You will deposit $10,000 today. It will grow for 10 years at 10% interest compounded monthly....
You will deposit $10,000 today. It will grow for 10 years at 10%
interest compounded monthly. You will then withdraw the funds
quarterly over the next 4 years. The annual interest rate over
those 4 years is 8%. Your quarterly withdrawal will be
A. $1691.90.
B. $1993.74.
C. $1789.37.
D. $660.87.
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?
You invest $x today at 8% APR compounded annually for 5 years (you invest only once)....
You invest $x today at 8% APR compounded annually for 5 years
(you invest only once). Your friend also invests some amount at the
same time at 8% APR compounded annually for 5 years. However, she
invests an additional amount equal to the accumulated interest at
the end of each year. You both end up having the same amount at the
end of 5 years. In order to achieve this, your initial investment
must have been t times as much...
You invest $x today at 8% APR compounded annually for 5 years (you invest only once)....
You invest $x today at 8% APR compounded annually for 5 years
(you invest only once). Your friend also invests some amount at the
same time at 8% APR compounded annually for 5 years. However, she
invests an additional amount equal to the accumulated interest at
the end of each year. You both end up having the same amount at the
end of 5 years. In order to achieve this, your initial investment
must have been t times as much...
I have three investment alternatives: The first one pays 3.6%APR with monthly compounding, the second...
I have three investment alternatives: The first one pays 3.6%
APR with monthly compounding, the second one pays 3.5% APR with
weekly compounding, and the third one pays 3.7% APR with quarterly
compounding. What is the effective annual rate for each one and
which one should I choose? What would be your second choice? Rank
them.
You have $100,000 in an account that earns 2% APR (Compounded monthly) You want to earn...
You have $100,000 in an account that earns 2% APR (Compounded
monthly)
You want to earn a higher rate of return and therefore are
considering two alternative investments. You will put your $100,000
in one of the two new accounts.
Investment 1 will pay you $860 per month for starting next month
120 months.
Investment 2 will pay you $2,600 per month for starting next month
40 months.
Which account should you choose and how much does it increase your...
You have $100,000 in an account that earns 2% APR (Compounded monthly) You want to earn...
You have $100,000 in an account that earns 2% APR (Compounded
monthly)
You want to earn a higher rate of return and therefore are
considering two alternative investments. You will put your $100,000
in one of the two new accounts.
Investment 1 will pay you $860 per month for starting next month
120 months.
Investment 2 will pay you $2,600 per month for starting next month
40 months.
Which account should you choose and how much does it increase your...
You deposit $1,000 in a saving account at 10% compounded annually. How much is your first...
You deposit $1,000 in a saving account at 10% compounded
annually. How much is your first year interest? How much is your
second year interest?
100, 100
100, 110
100, 120
100, 150
1. You deposit $2000 in an account earning 8% interest compounded monthly. How much will you...
1. You deposit $2000 in an account earning 8%
interest compounded monthly. How much will you have in the account
in 15 years?
2. Find the time required for an investment of
5000 dollars to grow to 9000 dollars at an interest rate of 7.5
percent per year, compounded quarterly.
Round your answer to two decimal places
___t years.
3. You deposit $3000 in an account earning 5%
interest compounded monthly. How much will you have in the account
in...
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