If you can make 6% interest on your money, how much is $1000 paid to you 12 year

Question

If you can make 6% interest on your money, how much is $1000 paid to you 12 years in the future worth to you now? Select one: A. $600.00 B. $560.00 C. $497.00 D. $597.00 Question 2 Question text How much will accumulate in an Individual Retirement Account (IRA) in 15 years if $500 is deposited in the account at the end of each quarter during that time? The account earns 12% interest, compounded quarterly. What is the effective interest rate? Select one: A. 15% B. 13.85% C. 12.55% D. 11.86% Question 3 Question text On January 1st a engineering student projects a need of $2400 on December 31st. What amount must be deposited in the credit union each month if the interest paid is 12%, compounded monthly? Select one: A. $166.83 B. $152.43 C. $208.25 D. $189.12

Explanation / Answer

Q1)

1000/1.06^12 = 497.

ans si C $497.00

Q2)

(1+0.12/4)^4 -1 = 0.1255 = 12.55%

ans is C. 12.55%

Q3)

monthly rate = 12/12 = 1 %

P*1.01^12 + P*1.01^11 + P*1.01^10 .......+P*1.01 = 2400

P = 187.36

ans is D. 189.12

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