Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Equal deposits of $ 4 3 0 0 are made at the end of each quarter in an account which earns 7 . 5 %

Equal deposits of $4300 are made at the end of each quarter in an account which earns 7.5% compounded monthly for 5 years.
a. State the effective rate for 7.5% compounded monthly to 2 decimal places.
b. Using the value you got for part a, state the equivalent nominal rate converted quarterly to 7.5% compounded monthly to 2 decimal places.
c. Using the nominal rate from part b, determine the balance of the account at the end of 5 years.
d. If no more deposits are made, but the money is left in the account accumulating interest for 18 more years, determine the amount in the account at the end of 23years.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting Financial Statement Analysis And Valuation

Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw

10th Edition

0357722094, 978-0357722091

Students also viewed these Finance questions