Harder Computations (4 points each) 11 12 13 Expert You deposited $10,000 into a savings account earning 6.000% and you let it sit for 10 years. How much did you earn in simple interest? 10,000 You deposited $10,000 into a savings account earning 6.000% and you let it sit for 10 years. Today the account is worth $17,908.48 How much did you earn due to compounding (e. what did you earn above and beyond simple interest; what was the difference? $ 1,908.48 Today you deposit $25,000 into a savings account that earns 6.000% for one year. At the end of year one, rates have changed, and now the account will earn 4.000%. What is the ending account balance at the end of year 2? FV = 25,000 (1.0L) -26,500 27,560.00 Today you make a $50,000 deposit into a saving account. It earns 3.000% the first year, 4.000% the second year, and 5.000% the third year. What is the ending account balance at the end of year 3? 51,500 $ 56,238.00 Today you deposit $20,000 into a savings account that earns 5.500% for the first five years and then earns 7.500% for the next five years. What is the ending account value after 10 years? $ 37.526.20 Today you deposit $20,000 into a savings account that earns 2.500%, and each year for five years you also deposit $5,000. At the end of these five years you stop making deposits and leave the account alone for another ten years, during which time the interest rate paid on the account is 3.500%. What is the ending account value? 14 115 26,139.20 6 Your aunt Maude passes away and leaves you $25,000, which you deposit into a bank account today. The bank account earns 5.000% interest. You want to withdraw an annual amount each year, over 20 years, until the account falls to zero fie. in this case your PV is $25,000 and your PV is so). What is the annual payment they can pay you each year? Your aunt Maude passes away and leaves you $25,000, which you deposit into a bank account today. You want to withdraw $2,500 each year, over 20 years, until the account falls to zero (ie. In this case your PV is $25,000 and your PV is $0). What rate of interest of you need to earn to achieve your goal? Hint: be careful to use the right signs (+/4). Tony Robbins Retirement Question 11: Today you deposit $10,000 and you save $6,000 every year for 40 years, in an account earning 4.000% interest. How much is the account worth at the end of year 407 Tony Robbins Retirement Question #2: Today you deposit $10,000 and you save $6,000 every year for 40 year. If your goal is to have $1,000,000 at the end of 40 years, what rate of interest must you earn? Hint: be careful to use the right signs (+/-). Harder Computations (4 points each) 11 12 13 Expert You deposited $10,000 into a savings account earning 6.000% and you let it sit for 10 years. How much did you earn in simple interest? 10,000 You deposited $10,000 into a savings account earning 6.000% and you let it sit for 10 years. Today the account is worth $17,908.48 How much did you earn due to compounding (e. what did you earn above and beyond simple interest; what was the difference? $ 1,908.48 Today you deposit $25,000 into a savings account that earns 6.000% for one year. At the end of year one, rates have changed, and now the account will earn 4.000%. What is the ending account balance at the end of year 2? FV = 25,000 (1.0L) -26,500 27,560.00 Today you make a $50,000 deposit into a saving account. It earns 3.000% the first year, 4.000% the second year, and 5.000% the third year. What is the ending account balance at the end of year 3? 51,500 $ 56,238.00 Today you deposit $20,000 into a savings account that earns 5.500% for the first five years and then earns 7.500% for the next five years. What is the ending account value after 10 years? $ 37.526.20 Today you deposit $20,000 into a savings account that earns 2.500%, and each year for five years you also deposit $5,000. At the end of these five years you stop making deposits and leave the account alone for another ten years, during which time the interest rate paid on the account is 3.500%. What is the ending account value? 14 115 26,139.20 6 Your aunt Maude passes away and leaves you $25,000, which you deposit into a bank account today. The bank account earns 5.000% interest. You want to withdraw an annual amount each year, over 20 years, until the account falls to zero fie. in this case your PV is $25,000 and your PV is so). What is the annual payment they can pay you each year? Your aunt Maude passes away and leaves you $25,000, which you deposit into a bank account today. You want to withdraw $2,500 each year, over 20 years, until the account falls to zero (ie. In this case your PV is $25,000 and your PV is $0). What rate of interest of you need to earn to achieve your goal? Hint: be careful to use the right signs (+/4). Tony Robbins Retirement Question 11: Today you deposit $10,000 and you save $6,000 every year for 40 years, in an account earning 4.000% interest. How much is the account worth at the end of year 407 Tony Robbins Retirement Question #2: Today you deposit $10,000 and you save $6,000 every year for 40 year. If your goal is to have $1,000,000 at the end of 40 years, what rate of interest must you earn? Hint: be careful to use the right signs (+/-)
