Aina just got her driver license, and she wants to buy a new car cost for RM70,000. She has RM3,000 to invest as a lump sum today. Aina is a conservative investor and she only invests in safe products. After approaching different banks, she is offered the following investment opportunities: Union Bank's savings account with an interest rate 10.8% compounded monthly First State Bank's savings account with an interest rate of 11.5% compounded annually. i) Calculate how long it will take Aina to accumulate enough money to buy the car in each of the investment opportunities. ii) Explain which investment opportunity should be taken by Aina

Aina just got her driver license, and she wants to buy a new car cost for RM70,000. She has RM3,000 to invest as a lump sum today. Aina is a conservative investor and she only invests in safe products. After approaching different banks, she is offered the following investment opportunities: Union Bank's savings account with an interest rate 10.8% compounded monthly First State Bank's savings account with an interest rate of 11.5% compounded annually. i) Calculate how long it will take Aina to accumulate enough money to buy the car in each of the investment opportunities. ii) Explain which investment opportunity should be taken by Aina

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 8E

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Aina just got her driver license, and she wants to buy a new car cost for RM70,000. She has RM3,000 to invest as a lump sum today. Aina is a conservative investor and she only invests in safe products. After approaching different banks, she is offered the following investment opportunities. Union Bank’s savings account with an interest rate 10.8% compounded monthly. First State Bank’s savings account with an interest rate of 11.5% compounded annually
SITUATION 3: Alice wants to be a 'wise' money saver. She has P100,000 and is willing to put it in the bank. She found two banks that accept saving based on a simple interest. One bank offers 15% simple interest and another offers 10% simple interest, and she invested in both banks. After a year, she withdraws all interest and capital and finds out she has P112 000. of at 24. How much money did she put on the bank that has the 10% interest? b. P30,000 d. P70,000 a. P60,000 c. P80,000 41 25. How much money did she put on the other bank? ne b. P20,000 d. B40,000 a. P4,000 en c. $7,000 26.1f she got a total of P113 000 after a year with her original money, how much money was she able to put up on the bank that rewards 15% simple interest? 0o 00 c. P80,000 d. P70,000 a ttle
1. Kyoko has $10,000 that she wants to invest. Her bank has several investment accounts to choose from, all compounding daily. Her goal is to have $15,000 by the time she finishes graduate school in 6 years. To the nearest hundredth of a percent, what should her minimum annual interest rate be in order to reach her goal? If you use an online financial calculator (look up "compound interest calculator") to answer this, provide a screenshot of three different scenarios that you tried, as well as the correct one.
Suppose that you withdraw ₱ 1,500.00 from your savings account. Over the weekend, several people want to borrow money from you. Read the stories and decide to whom you will lend your money. Story 1. Your younger sister is having a garage sale. She needs cash to make a change for the day. She will sell you a bond for ₱ 1,000.00 You will keep the bond for a week, and she promises to pay you back. Story 2. Your older brother has a small business idea but doesn’t have any money. He wants to borrow your ₱ 1,500.00 and promises to pay you back ₱1,800.00 in four weeks. Story 3. Your best friend at school, whom you know very well, wants to borrow your ₱1,500.00 to buy cupcakes. She plans to sell at a higher price and promises to pay you back ₱1,700.00 in two weeks. Whose bonds will you buy? Why?
Suppose that you withdraw ₱ 1,500.00 from your savings account. Over the weekend, several people want to borrow money from you. Read the stories and decide to whom you will lend your money. Story 1. Your younger sister is having a garage sale. She needs cash to make a change for the day. She will sell you a bond for ₱ 1,000.00 You will keep the bond for a week, and she promises to pay you back. Story 2. Your older brother has a small business idea but doesn’t have any money. He wants to borrow your ₱ 1,500.00 and promises to pay you back ₱1,800.00 in four weeks. Story 3. Your best friend at school, whom you know very well, wants to borrow your ₱1,500.00 to buy cupcakes. She plans to sell at a higher price and promises to pay you back ₱1,700.00 in two weeks. Whose bonds will you buy? Why? (WITH SOLUTION)
Maria plans to take a scheme loan to expand her trading business. Based on her survey, she ended up with two plans which are Plan A and Plan B. She could get enough cash through Plan A that uses simple interest promissory note which offers RM25,000 for 180 days with a simple interest rate of 10% per annum. On the other side, Plan B also offers RM26,000 with a bank discount loan of 11% for 180 days. i. Compare the value of interest in Plan A with the bank discount amount in Plan B. ii. Calculate the amount received by Maria in each plan. iii. Compute the maturity value for each plan. iv. Identify which plan is better for Maria to take a loan. Justify your answer.
Kayla Gordan plans to borrow $300,000 from ANZ bank to set up a Nail Salon.She currently has $10,000 in savings and she will use her house as security for the loan.Which of the following best represents a risk associated with this financing method? A.Kayla's proportion of business ownership will be diluted B.Interest payments are tax deductible C.Bank will repossess her house if she defaults on the loan D.Kayla is required to pay dividends to the bank
Dave invests $3,700 in a savings account at his local bank which gives 3.296 simple annual interest. He also invests $3,000 in an online savings account which gives 5.9% simple annual interest. After 15 years, which one will have earned more interest, and how much more interest will it have earned, to the nearest dollar? (Use I = Prt) The online account has $879 more than the local bank b. The online account has $179 more than the local bank C. The local bank has $776 more than the online account. d. The local bank: has $345 more than the ontine account.
Hannah is exploring savings options from several different banks and has settled on one of the financial products offered by Bank A. Calculate the effective annual interest rate for Hannah given that the nominal annual interest rate is 3% p.a. Note that the nominal interest rate is compounded monthly. Additionally, Bank B is offering the same product with an effective interest rate of 5.5% p.a. Given this, would Hannah be better off saving with Bank A or Bank B? Justify your answer.
Shashin has 4P dollars that he wants to invest in a savings account earning an interest rate of r at the end of every two weeks. Nimish suggests an alternative: that Shashin instead open four different savings accounts with the bank (all earning the same rate, r at the end of every two weeks), and invest P dollars into each of them. This way Shashin can take advantage of the great interest rate even more! Help Shashin determine which strategy to adopt.
Amir needs 12000 to get his business started as soon as possible. He decides to take a loan from a bank. If the amount of bank discount is 354.15, find the amount of the loan.
If Carlo is to purchase his dream car he needs to find a way to get P2,500 in cash right now! Carlo finds a bank that is willing to help him out. If the bank is willing to discount an amount to help Carlo – what is the amount of the loan Carlo must repay to the bank in 6 months? Assume the bank uses a discount rate of 8 ½%.