A person borrowed $1000 from Bank A, $1000 The nominal annual interest rate of all 3 banks are the same: 10%, compounded monthly. For Bank A, he needs to pay the all principal and interest at the end of 5 years. For Bank B, he needs to pay the interest at the end of every month, and pay the principle at the end of 5 years. For Bank C, he needs to pay 10 equal payments at the end of each 6-month period. Calculate the total amount of interest he paid to all 3 banks. ar car loan
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- You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
- Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?4. Suppose $5,000 is deposited in a savings and loan account that pays 5.5% interest compounded semiannually. Use compound interest to calculate the following:a. How much money will be saved?b. How much will be owed after 2 years?1. You deposited PHP1, 500 in a bank with an interest rate of 5% for 1 year. What is the future value of your deposit? 2. FNB pays 6% interest compounded semi-annually. SNB pays 6% compounded monthly. Which bank offers the higher effective annual rate? 3. You deposit PHP1, 000 in your bank account. If the bank pays 4% simple interest, how much interest will you accumulate in your account after 10 years?. a. What if the bank pays compound interest? 4. Mr. Sotto won PHP10 million in the lottery. He was very excited to collect his winnings and had several plans for his PHP10 million. He would buy his dream house, car, and a lot more. However, he was very disappointed when the officers from PCSO said that he will not get his PHP10 million pesos upfront. He, however, has the following options: Get 8.1 million upfront Receive 1 million every year for 10 years Receive 1.8 million every year for 5 years a. The current government bonds have a yield of 5% per annum. Which is the best option?…
- 2. Mr. Dizon borrowed P35,000.00 from the cooperative bank. Find the simple interest if it is to be paid after 5 months with an interest rate of 1.50 %per month.1. Mary Rose borrowed money from a bank amounted 12,000 with an interest rate of 11.5%, the monthly installments are 313.07. how long will it take to repay the loan? Supposed, Mary Rose has borrowed money from a financial institution that will be paid for about 2 years with monthly installments of 6,000. The bank charge 6% interest annually. How much is the principal loan?4) Find the account balance at the end of 10 years, if you deposit 15,000 in an account today if a. The bank pays interest at 12% per year. b. The bank pays interest at 6% every 6 months. c. The bank pays interest at 3% per quarter, d. The bank pays interest at 1% per month. What do you observe when you compare the balances for the four scenarios listed.
- 2) Suppose that you had deposited $125 in a bank account for each of the last 5 years. What annual interest rate is attached to this account if there is now (at the end of the fifth year) $758.92 in the account? A) 8% B) 10% C) 12% D) 14% E) 16%Suppose you borrowed $1,000 from the bank and the rate of interest was 5%. What would the simple interest be if the amount is borrowed for 1 year? Suppose you deposit $4,000 at a bank at a simple interest rate of 7.5% per year. How much money will you have in the bank after 10 years? Question 2: The following questions are related to Compounded Interest: You deposit $2000 in an account earning 3% interest compounded monthly. How much will you have in the account in 20 years? How much interest will you earn? How much would you need to deposit in an account now in order to have $6,000 in the account in 8 years? Assume the account earns 6% interest compounded monthly.You borrow $11,000 from the bank at an interest rate of 6%, compounded annually. You are required to make 10 equal end of-year payments to pay off the loan. a) What is the amount of these equal payments? b) What is the amount of the 10 payments if the first payment is not made until 3 years after receipt of the money?