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B1- John invests now $L in a term deposit at an annual interest rate of M% (compounding every N months) that matures in 1 year

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B1- John invests now $L in a term deposit at an annual interest rate of M% (compounding every N months) that matures in 1 year and a half. Check your student number and give the following values to L,M and N. L= first 5 numbers of your student number M= last number of your student number [if your last number is 0 , take 1 instead] N=2 if the last number of your student number is 0,1,2,3 or 4 N=3 if the last number of your student number is 5,6,7,8 or 9 (a) Write down your student number and define in your particular case what values L, M and N take. ( 0.5 marks) (b) Using the data that are relevant in your particular case, represent the investment on a time line, showing the different compounding periods and, for each period, the interest rate that applies. In this diagram, show the exact amount of the investment that is particular to your case and indicate where the future value F (not calculated yet) would be located. (2 marks) (c) Indicate with vertical arrows on the time line of part a) the precise times when the balance on which interest is calculated resets. Explain in words what will be the consequence of that reset for the interest calculation. Bonus (1 extra mark): calculate the interest earned over the first compounding period and the interest earned over the second compounding period. (0.5 marks) (d) Calculate the balance that John will get at the end of the term on his account. Write the general formula before you plug the numbers. Show all the details of your calculations. (2.5 marks) (e) Without making any additional calculations, explain in words whether more frequent compounding would have been a better deal for John and why. ( 0.5 marks) Hand-write the answers on a blank piece of paper with your full name and student number at the top of the page. Take a picture (or several pictures) if needed and convert it (or them) into a pdff fle. Upload the pdf file into this question. Only one pdf file can be uploaded so merge your pictures if needed. Carefully keep your hand-written answers and your original pictures for future reference. B1- John invests now $L in a term deposit at an annual interest rate of M% (compounding every N months) that matures in 1 year and a half. Check your student number and give the following values to L,M and N. L= first 5 numbers of your student number M= last number of your student number [if your last number is 0 , take 1 instead] N=2 if the last number of your student number is 0,1,2,3 or 4 N=3 if the last number of your student number is 5,6,7,8 or 9 (a) Write down your student number and define in your particular case what values L, M and N take. ( 0.5 marks) (b) Using the data that are relevant in your particular case, represent the investment on a time line, showing the different compounding periods and, for each period, the interest rate that applies. In this diagram, show the exact amount of the investment that is particular to your case and indicate where the future value F (not calculated yet) would be located. (2 marks) (c) Indicate with vertical arrows on the time line of part a) the precise times when the balance on which interest is calculated resets. Explain in words what will be the consequence of that reset for the interest calculation. Bonus (1 extra mark): calculate the interest earned over the first compounding period and the interest earned over the second compounding period. (0.5 marks) (d) Calculate the balance that John will get at the end of the term on his account. Write the general formula before you plug the numbers. Show all the details of your calculations. (2.5 marks) (e) Without making any additional calculations, explain in words whether more frequent compounding would have been a better deal for John and why. ( 0.5 marks) Hand-write the answers on a blank piece of paper with your full name and student number at the top of the page. Take a picture (or several pictures) if needed and convert it (or them) into a pdff fle. Upload the pdf file into this question. Only one pdf file can be uploaded so merge your pictures if needed. Carefully keep your hand-written answers and your original pictures for future reference

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