Assuming annual compounding

Assignment Help Business Economics

Reference no: EM13771106

You have just deposited $1000 in an investment that promises to pay you $100 per year for the next 20 years (starting at the end of this year). What is the effective annual interest rate earned for this investment, assuming annual compounding? As always, assume your account balance will be zero at the end of 20 years (i.e., your investment will be fully amortized). Please show all work and all steps.

Reference no: EM13771106

Questions Cloud

What is the initial effect on the money supply : Assume that they required reserve ratio is 10%. If the Federal Reserve buys a $10,000 government bond from an individual in the economy, what is the initial effect on the money supply? What is the ultimate effect on the money supply?

According to the national safety council : According to the National Safety Council, there are an ever increasing number of applications for robotics in today's industry. List and explain the principal hazards associated with the use of robots.

What can the individual do to alleviate this crisis : Given the current state of energy use, which continues to grow exponentially in such countries as China and India, what measures can the United States and other Western countries take to produce more fuel-efficient and environmentally friendly fuels?..

Calculate the unemployment rate : In July, 2013, in the economy of Sandy Island, 10,000 people were employed and 1,000 were unemployed. During August, 2012, 80 people lost their jobs and did not look for new ones, 20 people quit their jobs and retired, 150 people were hired or recall..

Assuming annual compounding : You have just deposited $1000 in an investment that promises to pay you $100 per year for the next 20 years (starting at the end of this year). What is the effective annual interest rate earned for this investment, assuming annual compounding? As alw..

Administrative controls and training : Explain why a comprehensive confined space management policy is important in any organization. What areas should a confined space management policy cover? What types of administrative controls and training should be designated in the policy?

Gene only evidence of age discrimination is an email : Gene Johnson, who worked for Cable Fixers, Inc. for 21 years, was terminated when he was 69 years old and was replaced by a much younger man who Cable Fixers paid a significantly lower salary than it was paying Gene. Gene's only evidence of age discr..

Which is better net exporter or net importer : Even though we recently became a net exporter for gasoline, it appears that for our overall trade with other countries, the U.S. is a net importer and I'm sure, you all know, especially with China, we are huge net importer. Is that good? Which is bet..

Use the cash flow approach to Show the EUAC values : A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O&M costs are $105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer is replaced, a new mixer..

User Account

All Pages