If you want an effective rate of 5 percent, what is an acceptable quoted rate if money is compounded monthly?

1. You deposit $ 760 in an account one time that compounds monthly at 2 percent. How much will you have in your account at the end of 10 years? Point value 8 2. A balloon payment of $ 21,000 on your house is due in 10 years. If you can earn an average of 5 percent per year for the 10 year period, how much must you place into an account today to have the $ 21,000 in 10 years? Point value 8 3. If you want an effective rate of 5 percent, what is an acceptable quoted rate if money is compounded monthly? Point value 8 Concept question 2: What is the difference between effective rate and stated rate? Point value 10 4. If inflation averages 4 percent per year, how much purchasing power will $ 1.00 lose in 10 years? Point value 8 Concept question 3: Explain the relationship between inflation and the time value of money. Point value 10 5. At the beginning of each year, you deposit the following into a growth mutual fund that earns 6 percent per year: Year Deposit Year 1 5,000.00 Year 2 7,500.00 Year 3 4,500.00 Year 4 5,500.00 Year 5 6,200.00 Total 28,700.00 How much should the fund be worth at the end of 5 years? Point value 9 6. Rochelle Kotter wants to attend a university 5 years from now. She will need $ 88,000. Assume Rochelle's bank pays 3 percent interest for a 5 year CD compounded monthly. What must Rochelle deposit today to accumulate $ 88,000 in 5 years? Point value 9 7. Pick two companies within the same industry that you are interested in. Find the stock price of each company on January 1, 2000, and on January 1, 2012. If you had purchased this stock, what would have been your internal rate of return? Point value 10