Problem # 1 (3 points) Walker John deposited $6,000 with his local bank and plan
ID: 1113272 • Letter: P
Question
Problem # 1 (3 points) Walker John deposited $6,000 with his local bank and plans to keep it on deposit for eight (8) years at an annual interest rate of 5.0% compounded quarterly. How much will Walker John have in the account at the end of year eight (8) Problem #2 (2 points) What is the present worth of a future payment of $18,000, six (6) years from today at an interest rate of six percent (6%) compounded annually? Problem #3 (4 points) (a) What is the amount of interest earned on $63,500 left on deposit for nine (9) years at six percent (6%) simple interest per year? (b) If the nominal interest rate is seven percent (7%) compounded continuously what is the effective interest rate? Problem, #4 (3 points) You deposit $1350 today, $1500 one (1) year from today, and S1900 six (6) years from today. How much money will you have at the end of eight (8) years given an interest rate of five percent (5%) compounded annually?Explanation / Answer
ans 1=
A=P[1+r/n]^nt
A = overall amount
P = principal deposited,
r = annual ROI
n = number of times compounded /annum
t = no. of years
In the problem we have,
P=6000
r=5%
n=4
t=8yrs.
A=6000[1+0.05/4]^4.8
A=6000 X1.488131
A= $8928.79
ans 1=
A=P[1+r/n]^nt
A = overall amount
P = principal deposited,
r = annual ROI
n = number of times compounded /annum
t = no. of years
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