1 You recently received a letter from Cut-to-the-Chase National Bank that offers
ID: 2665679 • Letter: 1
Question
1 You recently received a letter from Cut-to-the-Chase National Bank that offers you a new credit card that has no annual fee. It states that the annual percentage rate (APR) is 18 percent on outstanding balances.What is the effective annual interest rate? (Hint: Remember these companies bill you monthly.)
a. 18.81%
b. 19.56%
c. 19.25%
d. 20.00%
e. 18.00%
2 Which of the following investments has the highest effective annual rate (EAR)? (Assume that all CDs are of equal risk.)
a. A bank CD that pays 10 percent interest quarterly.
b. A bank CD that pays 10 percent monthly.
c. A bank CD that pays 10.2 percent annually.
d. A bank CD that pays 10 percent semiannually.
e. A bank CD that pays 9.6 percent daily (on a 365-day basis).
3 Elizabeth has $35,000 in an investment account. Her goal is to have the account grow to $100,000 in 10 years without having to make any additional contributions to the account. What effective annual rate of interest would she need to earn on the account in order to meet her goal?
a. 9.03%
b. 11.07%
c. 10.23%
d. 8.65%
e. 12.32%
4 Which one of the following investments provides the highest effective rate of return?
a. An investment that has a 9.9 percent nominal rate and quarterly annual compounding.
b. An investment that has a 9.7 percent nominal rate and daily (365) compounding.
c. An investment that has a 10.2 percent nominal rate and annual compounding.
d. An investment that has a 10 percent nominal rate and semiannual compounding.
e. An investment that has a 9.6 percent nominal rate and monthly compounding.
5 Which of the following investments would provide an investor the highest effective annual rate of return?
a. An investment that has a 9 percent nominal rate with semiannual compounding.
b. An investment that has a 9 percent nominal rate with quarterly compounding.
c. An investment that has a 9.2 percent nominal rate with annual compounding.
d. An investment that has an 8.9 percent nominal rate with monthly compounding.
e. An investment that has an 8.9 percent nominal rate with quarterly compounding.
6 On its savings accounts, the First National Bank offers a 5 percent nominal interest rate that is compounded monthly. Savings accounts at the Second National Bank have the same effective annual return, but interest is compounded quarterly. What nominal rate does the Second National Bank offer on its savings accounts?
a. 5.12%
b. 5.00%
c. 5.02%
d. 1.28%
e. 5.22%
7 You just put $1,000 in a bank account that pays 6 percent nominal annual interest, compounded monthly. How much will you have in your account after 3 years?
a. $1,006.00
b. $1,056.45
c. $1,180.32
d. $1,191.00
e. $1,196.68
8 Steven just deposited $10,000 in a bank account that has a 12 percent nominal interest rate, and the interest is compounded monthly. Steven also plans to contribute another $10,000 to the account one year (12 months) from now and another $20,000 to the account two years from now. How much will be in the account three years (36 months) from now?
a. $57,231
b. $48,993
c. $50,971
d. $49,542
e. $49,130
9 The Martin family recently deposited $1,000 in a bank account that pays a 6 percent nominal interest rate. Interest in the account will be compounded daily (365 days = 1 year). How much will they have in the account after 5 years?
a. $1,000.82
b. $1,433.29
c. $1,338.23
d. $1,349.82
e. $1,524.77
Step 1: Find the effective rate by entering the following data in your
10 Katherine wants to open a savings account, and she has obtained account information from two banks. Bank A has a nominal annual rate of
9 percent, with interest compounded quarterly. Bank B offers the same effective annual rate, but it compounds interest monthly. What is the nominal annual rate of return for a savings account from Bank B?
a. 8.906%
b. 8.920%
c. 8.933%
d. 8.951%
e. 9.068%
Explanation / Answer
1) EAR = (1 + APR / p)^p - 1 = (1 + 0.18 / 12) ^12 - 1 = 19.56% The correct option is b)19.56% 2) EAR = (1 + APR / p)^p - 1 = (1 + 0.10 / 12) ^12 - 1 = 10.47% The correct option is b) A bank CD that pays 10% monthly. 3) Calculating the interest rate using excel sheet: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "Rate" function as we are finding the interest rate in this case. Step3: Enter the values as Nper = 10; PMT = 0 ; PV = 35000 ; FV = -100000 Step4: Click "OK" to get the desired value. The value comes to "11.07%" The correct option is b) 11.07% 4) EAR = (1 + APR / p)^p - 1 = (1 + 0.099/4) ^4 - 1 = 10.27% The correct option is a) 9.9% nominal rate and quarterly compounding. 5) EAR = (1 + APR / p)^p - 1 = (1 + 0.09 / 4 ) ^ 4 - 1 =9.3% The correct option is b) 9% nominal rate with quarterly compounding. 6) The correct option is 5.02% 7) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 12 ; Nper = 36; PV = 1000; Step4: Click "OK" to get the desired value. The value comes to "$1,196.68" The correct option is e) $1,196.68 8) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% = (1 + 0.10 / 12) ^12 - 1 = 10.47% The correct option is b) A bank CD that pays 10% monthly. 3) Calculating the interest rate using excel sheet: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "Rate" function as we are finding the interest rate in this case. Step3: Enter the values as Nper = 10; PMT = 0 ; PV = 35000 ; FV = -100000 Step4: Click "OK" to get the desired value. The value comes to "11.07%" The correct option is b) 11.07% 4) EAR = (1 + APR / p)^p - 1 = (1 + 0.099/4) ^4 - 1 = 10.27% The correct option is a) 9.9% nominal rate and quarterly compounding. 5) EAR = (1 + APR / p)^p - 1 = (1 + 0.09 / 4 ) ^ 4 - 1 =9.3% The correct option is b) 9% nominal rate with quarterly compounding. 6) The correct option is 5.02% 7) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 12 ; Nper = 36; PV = 1000; Step4: Click "OK" to get the desired value. The value comes to "$1,196.68" The correct option is e) $1,196.68 8) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% = (1 + 0.099/4) ^4 - 1 = 10.27% The correct option is a) 9.9% nominal rate and quarterly compounding. 5) EAR = (1 + APR / p)^p - 1 = (1 + 0.09 / 4 ) ^ 4 - 1 =9.3% The correct option is b) 9% nominal rate with quarterly compounding. 6) The correct option is 5.02% 7) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 12 ; Nper = 36; PV = 1000; Step4: Click "OK" to get the desired value. The value comes to "$1,196.68" The correct option is e) $1,196.68 8) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% = (1 + 0.09 / 4 ) ^ 4 - 1 =9.3% The correct option is b) 9% nominal rate with quarterly compounding. 6) The correct option is 5.02% 7) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 12 ; Nper = 36; PV = 1000; Step4: Click "OK" to get the desired value. The value comes to "$1,196.68" The correct option is e) $1,196.68 8) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 12 ; Nper = 36; PV = 1000; Step4: Click "OK" to get the desired value. The value comes to "$1,196.68" The correct option is e) $1,196.68 8) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step3: Enter the values as Rate = 6% / 12 ; Nper = 36; PV = 1000; Step4: Click "OK" to get the desired value. The value comes to "$1,196.68" The correct option is e) $1,196.68 8) Calculating the future value: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step3: Enter the values as Rate = 12%/12 ; Nper = 12;PV= 10000; PMT = 0 Step4: Click "OK" to get the desired value. The value comes to "$11,268" The future value after year-1 is $11,268 Calculating the FV after year-2: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step3: Enter the values as Rate = 12%/12 ; Nper = 24; PV = $22,268 Step4: Click "OK" to get the desired value. The value comes to "$29,274" Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Calculating the FV after year-3: Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step3: Enter the values as Rate = 12%/12 ; Nper = 36 ; PV = 49,274 Step4: Click "OK" to get the desired value. The value comes to "$57,231" The correct option is a) 9) Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Calculating the FV : Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step1: Go to excel and click "insert" to insert the function. Step2: Select the "FV" function as we are finding the Future value in this case. Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92% Step3: Enter the values as Rate = 6% / 365; Nper = 365 * 5 ; PV = 1000 Step4: Click "OK" to get the desired value. The value comes to "$1,349.82" Correct option is d) 10) The correct option is b) 8.92%Related Questions
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