Question
I need help answering the questions about math of finance. Formulas that could be used: Finding the amount (S) S = P(1 + rt) c
I need help answering the questions about math of finance.
Formulas that could be used:
Finding the amount (S)
S = P(1 + rt)c = P(1 + i)c
Finding the present value (P)
P = S / (1+i)c . Using the fact that x -c = 1 / xc
Effective Interest Rate
(1+i)m -1 = (1 + r/m)m -1
Finding the time:
c = log b / log a or by C = ln b / ln a
Question 1:
An investor wants to accumulate $4,200 in three years. He can make equal deposits after six months, eighteen months and twenty four months. If money can earn 4.8% compounded quarterly, determine the size of each deposit.
Question 2:
$5000 is borrowed for six years at a rate of 8.4% compounded semiannually. Two equal payments will be made to settle the debt. Determine the size of the payments if the payments are made after one year and after two years.
Question 3:
A couple wants to accumulate $10,000 in three years for a trip to Europe. Equal payments will be made at the end of each year. Determine the size of the payments if money can earn 9.6% compounded quarterly.
Question 4:
A deposit of$400 was made. Eleven months later the money was withdrawn. If the account earned 12% compounded quarterly, determine the amount of money that was withdrawn.
Question 5:
An amount of $3700 was deposited on January 1, 2013 into an account which earns 10% compounded quarterly. If interest is calculated on January 1st , April 1st , July 1st and October 1st, determine the balance of the account on February 1, 2019
Question 6:
An amount of $750 is deposited into an account which pays 4.2% interest compounded semiannually. Find the value of the account after thirty-one months.
Please show the steps and the formulas and include a time line.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started