A bank that provides overdraft protection charges 8 percent for 8 each $100 (or portion of $100) borrowed when an overdraft occurs. a. What amount of interest would the customer pay for a $180 overdraft? (Assume the interest is for the full amount borrowed for a whole year.) Interest amount $ 14 b. How much would be saved by using the overdraft protection loan if a customer has two overdraft charges of $35 each during the year? 2 Savings A certificate of deposit often charges a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the amount for early withdrawal on a CD paying 8 percent and valued at $32,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Early withdrawal penalty With a 30 percent marginal tax rate, would a tax-free yield of 6.3 percent or a taxable yield of 8.9 percent give you a better return on your savings? Tax-free yield of 6.3 percent. Taxable yield of 6.3 percent A payday loan company charges 3.4 percent interest for a two- week period. What would be the annual interest rate from that company? (Assume an even 52 weeks per year. Enter your answer as a percent rounded to 1 decimal place.) Annual interest rate % What would be the annual percentage yield for a savings account that earned $71 in interest on $1,000 over the past 365 days? (Enter your answer as a percent rounded to 1 decimal place.) Annual percentage yield % What is the annual opportunity cost of a checking account that requires a $200 minimum balance to avoid service charges? Assume an interest rate of 2 percent. (Round your answer to 2 decimal places. Input the amount as a positive value.) Opportunity cost For each of these situations, determine the savings amount. Use the time value of money tables in Exhibit 1-A, Exhibit 1-B, and Exhibit 1-C a. What would be the value of a savings account started with $500, earning 9 percent (compounded annually) after 9 years? (Round FV factor to 3 decimal places and final answer to the nearest whole dollar.) Future value b. Brenda Young desires to have $11,000 eight years from now for her daughter's college fund. If she will earn 8 percent (compounded annually) on her money, what amount should she deposit now? Use the present value of a single amount calculation. (Round PV factor to 3 decimal places and final answer to the nearest whole dollar.) Present value c. What amount would you have if you deposited $1,600 a year for 30 years at 9 percent (compounded annually)? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) Future value xhibit 1-A Future Value (Compounded Sum) of $1 after a Given Number of Time Periods Period 1 1 1.010 1.020 1.030 3 4 5 6 7 7 8 9 TO 11 12 13 14 15 16 17 18 19 20 25 30 40 50 1.051 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 1.173 1.184 1.196 1.208 1.220 1.282 1.348 1.489 1.645 1.020 1.040 1.061 1.082 1. 104 1. 126 1. 149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 1.373 1.400 1.428 1.457 1.486 1.641 33 1.030 1.061 1.093 1.126 1.159 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 1.754 1.806 2.094 2.427 3.262 4.384 4% 1.040 1.082 1. 125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 1.539 1.601 1.665 1.732 1.801 1.873 1.948 2.026 2. 107 53 1.050 1. 103 1. 158 1.216 1.276 1.340 1.407 1,477 1.551 1.629 1.710 1.796 1.886 1.980 2.079 2.183 2.292 2.407 2.527 2.653 3.386 4.322 7.040 11.467 6% 1.060 1. 124 1. 191 1.262 1.338 1.419 1.504 1.594 1.689 1.791 1.898 2.012 2.133 2.261 2.397 2.540 2.693 2.854 3.026 3.207 4.292 5.743 10.286 18.420 7% 1.070 1.145 1.225 1.311 1.403 1.501 1.606 1.718 1.838 1.967 2.105 2.252 2.410 2.579 2.759 2.952 3.159 3.380 3.617 3.870 5.427 7.612 14.974 29.457 B% 1.090 1.166 1.260 1.360 1.469 1.587 1.714 1.851 1.999 2.159 2.332 2.518 2.720 2.937 3.172 3.426 3.700 3.996 4.316 4.661 6.848 10.063 21.725 46.902 9% 1.090 1.188 1.295 1.412 1.539 1.677 1.828 1.993 2.172 2.367 2.580 2.813 3.066 3.342 3.642 3.970 4.328 4.717 5.142 5.604 8.623 13.268 31.409 74.358 10% 1.100 1.210 1.331 1.464 1.611 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 4.595 5.054 5.560 6.116 6.727 10.835 17.449 45.259 117.390 1.110 1.232 1.368 1.518 1.685 1.870 2.076 2.305 2.558 2.839 3.152 3.498 3.883 4.310 4.785 5.311 5.895 6.544 7.263 8.062 13.585 22.892 65.001 184.570 2.191 1.811 2.666 3.243 4.801 7. 107 2.208 2.692 14% 1.140 1.300 12% 1.120 1.254 1.405 1.574 1.762 1.482 1.974 eriod 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2.211 2.476 2.773 3. 106 3.479 3.896 4.363 4.887 5.474 6. 130 0.139 6.866 2.00 .690 7.690 8.61 8.613 9.646 17.000 29.960 93.051 289.000 13% 1. 130 1.277 1.443 1.630 1.842 2.082 2.353 2.658 3.004 3.395 3.836 4.335 4.898 5.535 6.254 7.067 200 7.986 20 9.14 9.024 10. 11.52 21.231 39.116 132.780 450.740 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 20 7.138 8.137 9.276 2. 10.575 10.12 12.056 12.30 13.743 13./43 26.462 50.950 188.880 700.230 15% 1.150 1.323 1.521 1.749 2.011 2.313 2.660 3.059 3.518 4.046 4.652 --- 5.350 6. 153 7.076 00 8.137 9.358 10.761 100 12.375 14.232 10.30 16.367 32.919 66.212 267.860 1,083.700 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 2 3.803 4.411 5.117 5.936 6.886 7.988 9.266 10.748 12.46B 1211100 14.463 14.403 16.777 12 12:10 19.461 40.874 85.850 378.720 1,670.700 17% 1.170 1.369 1.602 1.874 2.192 2.565 3.001 3.511 4.108 4.807 5.624 6.580 7.699 9.007 10.539 12.330 12.30 14.426 16.879 10.079 19.748 23. 106 50.658 111.070 533.870 2,566.200 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4.435 5.234 6.176 7.288 100 8.599 10.14 10.147 11.974 14. 129 16 16.672 19.673 12.00 23. 214 27.393 1393 62.669 021 143.370 750.380 3,927.400 19% 1.190 1.416 1.685 2.005 2.386 2.840 3.379 4.021 *** 4.785 5.696 . 6.777 8.064 0.009 9.596 22 11.420 104 13.590 16.172 10.17 19.244 22.091