Question
First City Bank pays 5 percent simple interest on its savings account balances, whereas Second City Bank pays 5 percent interest compounded annually. If you
First City Bank pays 5 percent simple interest on its savings account balances, whereas Second City Bank pays 5 percent interest compounded annually.
If you made a deposit of $11,500 in each bank, how much more money would you earn from your Second City Bank account at the end of 12 years?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You have just received notification that you have won the $2.17 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 63 years from now.
What is the present value of your windfall if the appropriate discount rate is 10 percent?(Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, roundedto 2 decimal places, e.g., 1,234,567.89.)
Suppose you are committed to owning a $165,000 Ferrari.If you believe your mutual fund can achieve an annual return of 10.3 percent, and you want to buy the car in 9 years on the day you turn 30, how much must you invest today?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You have just made your first $5,000 contribution to your individual retirement account. Assume you earn an annual return of 10.95 percent and make no additional contributions.
a.What will your account be worth when you retire in 41 years?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)b.What if you wait 10 years before contributing?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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