19. Dr. Robert invested $9091 in a one-year CD that earned 3.00% interest compou
ID: 2714114 • Letter: 1
Question
19. Dr. Robert invested $9091 in a one-year CD that earned 3.00% interest compounded daily well as the interest the chart below to When the term of that CD ended, he reinvested the original principal as well as the inte determine how much total interest Dr. Robert earned by the end of the second term. into a one-year CD that earned 4.5% interest compounded monthly. Use Amount of $1.00 Invested for a 1 Year Interest Period $1.015113 Annual Rate 1.50% 3.00% 4.5096 6.00% $1.015104 $1.030416 $1.045940 $1.061678 $1.030453 $1.061831 20. Lizzy can invest $64,000 at 3.00% interest compounded monthly for a one-year term,or at 1.5% compounded daily for a one-year term. Use the chart above and determine which investment yields a better return. What is the annual percent yield for that investment? After consulting his broker, Sgt. Henry Pepper purchases 600 shares of Octopus, Inc. stock at $1.31 per share. He also pays $0.84 per share for 800 shares of Her Majesty Co. stock. His broker charges a fee of S0.005 per share for stocks priced under S1.00 and a fee of 0.6% of the stock principal for all other stocks. What is the total cost of Henry's stock investment, including commission? 21. 22. Mr. Mustard and his sister Pam made a stock investment together. They purchased 450 shares of Polythane stock for $12.88 per share. A month later they purchased another 200 shares of the stock for $15.23 per share. A month after that, Mr. Mustard and Pam sold all of their stock at a price of $14.01 per share The commission cost for each transaction was 1% of the principal of that transaction. What was the profit or loss from the sale? 2328 (over) 23Explanation / Answer
Ans 19 – Interest earned in first year = 9091 x 0.030453 = $276.848223. Amount reinvested in the second CD = 9091 + 276.848223 = $9367.848223. Interest earned in second year = 9367.848223 x 0.045940 = $430.35894736462. Total Interest earned = $707.21 rounded off to two decimal.
Ans 20 – The investment with 3.00 % interest compounded monthly yields a better return of 3.0416%.
Ans 21 – Cost of purchasing shares of Octopus Inc. – 600 x 1.31 x 1.006 = $790.716. Cost of purchasing shares of Her Majesty Co. – 800 x 0.84 x 1.005 = $675.36. Total costs of investment = 790.716 + 675.36 = $1466.076.
Ans 22 – Cost of first purchase = 450 x 12.88 x 1.01 = $5853.96. Cost of second purchase = 200 x 15.23 x 1.01 = $3076.46. Total Cost = 5853.96 + 3076.46 = $8930.42. Total Revenue from sale of stocks = 650 x 14.01 x 0.99 = $9015.435. Hence there is a profit of 9015.435 – 8930.42 = $85.015
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.