Charter Bank pays a 4.30% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF\%) does the bank pay? a. 5.04% b. 5.44% c. 4.39% d. 4.74% e. 5.09% Check My Work (1 remaining) What is the present value of a security that will pay $50,000 in 20 years if securities of equal risk pay 4% annually? Do not round intermediate calculations. Round your answer to the nearest cent. Assignment: Fall 2023 Problem Set 3 Assignment Score: 0.00% Questions Question 18 of 27 16. Check My Work (1 remaining) 17. 18. You are considering investing in a bank account that pays a nominal annual rate of 7%, compounded 19. monthly. If you invest $3,000 at the end of each month, how many months will it take for your 19. account to grow to $310,000 ? 20. a. 90.84 21. b. 93.27 22. c. 81.11 23. d. 95.70 24. e. 72.18 You agree to make 24 deposits of $500 at the beginning of each month into a bank account. At the end of the 24th month, you will have $13,000 in your account. If the bank compounds interest monthly, what nominal annual interest rate will you be earning? a. 8.91% b. 6.63% c. 5.79% d. 8.00% e. 7.62% You plan to invest in securities that pay 11.2%, compounded annually. If you invest $5, ooo today, how many years will it take for your investment to grow to $9,140.20 ? a. 6.36 b. 5.85 c. 5.63 d. 5.68 e. 4.60 You want to buy a new sports car 3 years from now, and you plan to save $6,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3 rd deposit, 3 years from now? a. $24,284,12 b. $17,233.89 c. $19,779.80 d. $19,583.96 e. $22,521,56 Your aunt has $270,000 invested at 5.5%, and she now wants to retire. She wants to withdraw $45,000 at the beginning of each year, beginning immediately. She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. For how many years can she make the $45,000 withdrawals and still have $50,000 left in the end? a. 9.19 b. 8.94 c. 8.06 d. 7.98 e. 8.30 All other things held constant, the present value of a given annual annuity decreases as the number of periods per year increases. a. True b. False All other things held constant, the present value of a given annual annuity decreases as the number of periods per year increases. a. True b. False Midway through the life of an amortized loan, the percentage of the payment that represents interest could be equal to, less than, or greater than to the percentage that represents repayment of principal. The proportions depend on the original life of the loan and the interest rate. a. True b. False If you deposit $8,000 in a bank account that pays 12% interest annually, how much will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. Last year Thomson Inc's earnings per share were $3.50, and its growth rate during the prior 5 years was 6.6% per year. If that growth rate were maintained, how many years would it take for Thomson's EPS to triple? a. 15.81 b. 13.41 c. 15.99 d. 17.19 e. 15.13 Charter Bank pays a 4.30% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF\%) does the bank pay? a. 5.04% b. 5.44% c. 4.39% d. 4.74% e. 5.09% Check My Work (1 remaining) What is the present value of a security that will pay $50,000 in 20 years if securities of equal risk pay 4% annually? Do not round intermediate calculations. Round your answer to the nearest cent. Assignment: Fall 2023 Problem Set 3 Assignment Score: 0.00% Questions Question 18 of 27 16. Check My Work (1 remaining) 17. 18. You are considering investing in a bank account that pays a nominal annual rate of 7%, compounded 19. monthly. If you invest $3,000 at the end of each month, how many months will it take for your 19. account to grow to $310,000 ? 20. a. 90.84 21. b. 93.27 22. c. 81.11 23. d. 95.70 24. e. 72.18 You agree to make 24 deposits of $500 at the beginning of each month into a bank account. At the end of the 24th month, you will have $13,000 in your account. If the bank compounds interest monthly, what nominal annual interest rate will you be earning? a. 8.91% b. 6.63% c. 5.79% d. 8.00% e. 7.62% You plan to invest in securities that pay 11.2%, compounded annually. If you invest $5, ooo today, how many years will it take for your investment to grow to $9,140.20 ? a. 6.36 b. 5.85 c. 5.63 d. 5.68 e. 4.60 You want to buy a new sports car 3 years from now, and you plan to save $6,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3 rd deposit, 3 years from now? a. $24,284,12 b. $17,233.89 c. $19,779.80 d. $19,583.96 e. $22,521,56 Your aunt has $270,000 invested at 5.5%, and she now wants to retire. She wants to withdraw $45,000 at the beginning of each year, beginning immediately. She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. For how many years can she make the $45,000 withdrawals and still have $50,000 left in the end? a. 9.19 b. 8.94 c. 8.06 d. 7.98 e. 8.30 All other things held constant, the present value of a given annual annuity decreases as the number of periods per year increases. a. True b. False All other things held constant, the present value of a given annual annuity decreases as the number of periods per year increases. a. True b. False Midway through the life of an amortized loan, the percentage of the payment that represents interest could be equal to, less than, or greater than to the percentage that represents repayment of principal. The proportions depend on the original life of the loan and the interest rate. a. True b. False If you deposit $8,000 in a bank account that pays 12% interest annually, how much will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. Last year Thomson Inc's earnings per share were $3.50, and its growth rate during the prior 5 years was 6.6% per year. If that growth rate were maintained, how many years would it take for Thomson's EPS to triple? a. 15.81 b. 13.41 c. 15.99 d. 17.19 e. 15.13