Calculate the total amount of interest accumulated

Assignment Help Financial Management

Reference no: EM13987811

1. Bob invests $1000 for a certificate of deposit that pays 5 percent interest and is compounded annually. The certificate matures after 12 years. Calculate the total amount of interest accumulated after 12 years.

Use the information from Exercise 1.

2. How much interest will you earn if the interest is withdrawn each year?

3. Why are the answers to Exercises 1 and 2 - Part a different?

Reference no: EM13987811

Questions Cloud

Services for revenue as cost driver for financial service : Assume that the hospital uses salary dollars as the cost driver for General Administration, housekeeping labor hours as the cost driver for Facilities, and patient in services for revenue as the cost driver for Financial Services. Allocate the hospit..

What is the portfolios expected return : A portfolio is invested 14 percent in Stock G, 54 percent in Stock J, and 32 percent in Stock K. The expected returns on these stocks are 9 percent, 15 percent, and 18 percent, respectively. What is the portfolio's expected return?

Latest fiscal reports in the investor relations : You can find this information in the following sources: "Wall Street Journal," "New York Times," Yahoo Finance, Bloomberg, and company web sites. The company web site will often provide you with the latest fiscal reports in the "investor relations" s..

Forecast that for the next five years dividends will grow : The Amazing Video Co. has just paid an annual dividend of 40 cents. You forecast that for the next five years dividends will grow at the rate of 25% a year over the period. Draw the time line showing the dividends per share of this stock for years 1 ..

Calculate the total amount of interest accumulated : Bob invests $1000 for a certificate of deposit that pays 5 percent interest and is compounded annually. The certificate matures after 12 years. Calculate the total amount of interest accumulated after 12 years. How much interest will you earn if the ..

The required rate of return on the market : The risk free rate of return is 8 percent, the required rate of return on the market, E(RM) is 12 percent, and stock X has a beta coefficient of 1.4. If the dividend expected during the coming year, D1, is $2.50 and g= 5%, at what price should stock ..

Risk-free rate-expected return on the market portfolio : Given that the risk-free rate is 5%, the expected return on the market portfolio is 20%, and the standard deviation of returns to the market portfolio is 20%, answer the following questions: a. You have $100,000 to invest. How should you allocate you..

Accounting breakeven quantity : A company is considering a project to manufacture a product with the following pro forma cost and sales information: Accounting Breakeven QUANTITY = 10,500 units; Cash Breakeven QUANTITY = 8,200 units; What is the PRICE of the product under this expe..

A natural monopoly can charge a price : A natural monopoly can charge a price above MC where MC = MR, because

User Account

All Pages