3. You have a bank deposit now worth $5000. How long will it take for your deposit to be worth more than $8000 if: (a) The account pays 5 percent actual (per sub-period) interest every half-year and is compounded every half- year? (b) The account pays 5 percent nominal interest, compounded semiannually?
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- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
- You have a bank deposit now worth $5000. How long will it take for your deposit to be worth more than $8000 if a. The account pays 5 percent actual interest every half-year and is com- pounded every half-year? b. The account pays 5 percent nominal interest, compounded semiannually?2. Suppose you deposit shs 5,000,000 into an account earning 4 percent interest, compounded monthly. a) How many years will it take for your account to be worth shs7, 500,000? b) Suppose in addition to the initial shs5, 000,000 deposit, you will make monthly contributions of shs50, 000. How many years will it take for the account to grow to shs7, 500,000 in this case? c) How does your answer change if you make quarterly deposits of shs150, 000 rather than monthly contributions of shs 50,000? Explain the reason for any difference in your answer from part b. Maintain the assumption that interest compounds monthly. 3. (a)What do you understand by ordinary share? Preference share? (b)Give features of each of the two? (c)The Brigapenski Company has just paid a cash dividend of Tshs 20 per share. Investors require a 16% return from investments such as this. If the dividend is expected to grow at a steady 8% per year, what is the current value of the stock? What is the stock's worth in 5…2. Deposit the principal amount of P10,000 into a savings account that pays interest at the rate of 5%. What is the amount in the account after 1 year if the account is: a. compounded annually b. compounded semi-annually c. compounded quarterly d. compounded monthly e. Which is advantageous to the investor?
- 1. If you deposit OMR 32000 today in to a bank account that pays 4% interest compounded, how much money would you have in the account at the end of 5 years.You deposit $4,000 today in a bank that promises to pay an annual interest of 8%? What is future value of this sum at the end of 12 years? b. What if the bank pays 8% interest compounded monthly? What if the bank pays 8% interest compounded quarterly? What interest will the bank have to pay if the future value has to be $12,000 at the end of 12 years? d. Using information from (la) only, what quarterly compounded interest rate should the bank quote in order to provide the same interest as the 10% annual rate? What should be the quoted continuously compounded rate if it is to be the same as the 10% annual rate? Provide the rates per annum. What is the APR? Do we use APR or EAR when we are calculating the present а. с. е. value of an investment?1. You deposited PHP1, 500 in a bank with an interest rate of 5% for 1 year. What is the future value of your deposit? 2. FNB pays 6% interest compounded semi-annually. SNB pays 6% compounded monthly. Which bank offers the higher effective annual rate? 3. You deposit PHP1, 000 in your bank account. If the bank pays 4% simple interest, how much interest will you accumulate in your account after 10 years?. a. What if the bank pays compound interest? 4. Mr. Sotto won PHP10 million in the lottery. He was very excited to collect his winnings and had several plans for his PHP10 million. He would buy his dream house, car, and a lot more. However, he was very disappointed when the officers from PCSO said that he will not get his PHP10 million pesos upfront. He, however, has the following options: Get 8.1 million upfront Receive 1 million every year for 10 years Receive 1.8 million every year for 5 years a. The current government bonds have a yield of 5% per annum. Which is the best option?…
- K You plan to deposit $700 in a bank account now and $100 at the end of the year. If the account earns 7% interest per year, what will be the balance in the account right after you make the second deposit? ... The balance in the account right after you make the second deposit will be $ (Round to the nearest dollar.)Suppose you need to have $57,942.00 in an account 25.00 years from today and that the account pays 11.00%. How much do you have to deposit into the account 5.00 years from today? Suppose you deposit $1,101.00 into an account 7.00 years from today. Exactly 15.00 years from today the account is worth $1,466.00. What was the account's interest rate? Suppose you deposit $1,093.00 into an account 7.00 years from today that earns 12.00%. It will be worth $1,613.00 _____ years from today. Assume the real rate of interest is 2.00% and the inflation rate is 4.00%. What is the value today of receiving 10,528.00 in 15.00 years?2. If you want to have $22,431 in fifteen years, how much do you need to deposit in a bank account today? Assume that the annual interest rate is 10% compounded annually. Round your answer to the nearest one dollar.