6. You want to have $4000 in your savings account after 2 years. Find the amount you should deposit for each of the situations described below. a. The account pays 3% annual interest compounded monthly. b. The account pays 4% annual interest compounded continuously.
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- 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?Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?4. You want to deposit $600 in a savings account. Account A earns 3.5% simple interest per year. Account B earns 3.3% interest compounded annually. a. Which account should you choose if you invest your money for 3 years? 6 years? Explain. b. After how many years is the balance in Account B greater than the balance in Account A? c. After how many years is the difference between the account balances greater than $5?
- 6. You deposit $2100 in a savings account paying 5.5% simple interest. The solution to this problem is not accomplished by an excel formula. Use the formula I = PRT where T is in yearsa) How much interest will you earn in 18 months? b) How much will be in your account at the end of 18 months?Assume that you deposit RM700 in a savings account that pays 5% per year over 6 years. Your savings benefits from _____ as you leave the interest earnings in your account, and your interest earnings increases every year. Select one: a. compounding b. accumulating c. discounting d. aggregatingIf you deposit $100 in a savings account at the end of each month for 2 years, the balance will be a function f (r) of the interest rate, r%. At 7% interest (compounded monthly), f (7) = 2568.10 and f (7) = 25.06. Approximately how much additional money would you earn if the bank paid 7 1/2 % interest?
- 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?4. Suppose $5,000 is deposited in a savings and loan account that pays 5.5% interest compounded semiannually. Use compound interest to calculate the following:a. How much money will be saved?b. How much will be owed after 2 years?5. a) Complete the following table for the first 4 periods of an annuity that pays 8.2% compounded monthly. You are making $250 payments at the end of each period. Your initial deposit is $3000. Period Interest earned Payment Ending Balance 3000.00 2 4 b) How much will be in your account at the end of the 4th period? c) How much did you contribute? d) How much interest was earned?
- Suppose that you deposit $7000 in a savings account that pays 4% annual interest, with interest credited to the account at the end of each year. Assuming that no withdrawals are made, complete the following: a. Find the balance in the account after 5 years. b. Find the balance of the account after 9 years and 10 months.Suppose you currently have $4,800 in your savings account, and your bank pays interest at a rate of 0.47% per month. If you make no further deposits or withdrawals, how much will you have in the account in 6 years? In 6 years' time, you will have $________ in the account.Assume that you are depositing RM500 today in a savings account that pay 6% interest per year for 7 years. The term _____ value refers to the total value of the deposit after 7 years. Select one: a. principal b. future c. compound d. present