User Account

All Pages

Certificate of deposit at a bank

Assignment Help Financial Management
Reference no: EM131012717

You purchase a $5,000 certificate of deposit* (CD) at a bank. The terms of the CD provide that if you do not withdrawal your funds for three years, you will receive 4.00% interest, compounding quarterly. If you leave your funds in the bank for all three years, how much will you have at the end of the CD period?

*Purchasing a certificate of deposit is akin to making a loan to the bank, wherein you agree to give the bank the funds at the beginning of the CD term, and not require that bank repay the “loan” until the end of the CD term.

What is your effective annual yield on the CD described in Problem 1?

Reference no: EM131012717

Questions Cloud

Examine shakespeare stages of man : Start with the ethereal and then move through the stages of life from childhood to old age- perhaps the return to etherealness after death. Your only limits are you creativity. Examine Shakespeare's stages of man if your need some guidance
What annual equal payment series : What annual equal payment series is necessary to repay the following increasing series of payments?
The method of budgeting is being employed : The method of budgeting is being employed when expenditures are allocated based on the industry averages of advertising expenditures.  The budget is set to maintain a level consistent with industry spending.
How much will you have to repay at the end of the loan term : On January 1, 2016, you take out a $10,000 loan to purchase a piece of equipment. The interest rate is 6%. You will make monthly payments of $300 on the first of each month, beginning February 1, 2016, until the loan matures. How much will you have t..
Certificate of deposit at a bank : You purchase a $5,000 certificate of deposit* (CD) at a bank. The terms of the CD provide that if you do not withdrawal your funds for three years, you will receive 4.00% interest, compounding quarterly. If you leave your funds in the bank for all th..
What is the greens fee per round : What is the greens fee per round that will provide a return on investment of 15%? Assume that the greens fee will be increased at an annual rate of 5%
Determine maximum load pmax that be supported by structure : A pin-connected truss is loaded and supported as shown. Each aluminum member has a cross-sectional area of A = 2.6 in.2. Assume a = 4.75 ft and b = 5.70 ft. If the normal stress in each member must not exceed 60 ksi, determine the maximum load Pma..
Use to determine which payment option he prefers : Jesse just won the state lottery. He has been given the option of receiving either $62.9 million today or $5 million a year for the next 35 years, with the first payment paid today. Describe the process that Jesse should use to determine which paymen..
Is caring for others a way of caring for the self : In "The Old Dictionary", there is a relationship between care of the self and care of others, both other people and things also. Discuss that relationship. Would you say there is a tension between care of the self and others? Is caring for othe..

Reviews

Write a Review

Financial Management Questions & Answers

  Market expected return

A stock has an expected return of 18 percent, its beta is 1.45, and the risk-free rate is 4 percent. What must the expected return on the market be?

  What is another way to define market efficiency

What is another way to define market efficiency? What is likely to happen if bond prices decrease? Which of the following is NOT considered a basic stockholder right? How are bonds similar to preferred stock?

  Calculate the return for investing in boeing stock

Using the data in the following table, calculate the return for investing in Boeing stock fro January 2, 2008, to January 2, 2009, January 3,2011, to January 3, 2012, assuing all dividends are reinvested in the stock immediately.

  Assume that the interest received at the end of the year

You placed $6,397 in a savings account today that earns an annual interest rate of 7 percent compounded annually. How much will you have in the account at the end of 26 years? Assume that the interest received at the end of the year is reinvested to ..

  Companys capital structure weights on a book value basis

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $80, and the book value per share is $7. The company also has two bond issues outstanding. What are the company's capital structure weights on a book value ba..

  How did acquiring burts bees affect them next few years

How was Clorox Company doing financially in 2006/07 ( its stock versus The Dow) and why pay $925 million for Burts Bees? Also, how did acquiring Burts Bees affect them the next few years?

  Compute the late filing and late payment penalty

Mr. and Mrs. Pratt failed to apply for an extension of time to file their 2014 Form 1040 and didn't mail the return to the IRS until May 29, 2015. Assuming the Pratt's had no excuse for filing a delinquent return, compute their late filing and late p..

  Firms weighted marginal cost of capital schedule

Texas Transport has five possible investment projects for the coming year. Each project is indivisible. The firm's weighted marginal cost of capital schedule is 12 percent for up to $6 million of investment; 16 percent for between $6 million and $18 ..

  Expected to pay a dividend

Lifecycle Motorcycle Company is expected to pay a dividend in year 1 of $2.00, a dividend in year 2 of $2.80, and a dividend in year 3 of $3.20. After year 3, dividends are expected to grow at the rate of 6% per year. An appropriate required return f..

  Actuarial finance problem

(Actuarial Finance problem) Assuming that \lambda=0, m=86.34, and b=9.5 as GoMa parameters, compute the value and the duration of a deferred pension annuity purchased at age 62, under a valuation rate of r=5.5%, that pays $10,000 per year for life st..

  Tax consistent with a mechanistic view of government

Obesity is perceived to be a national health problem in the United States. One suggestion to deal with this problem is a “fat tax.” The idea is to levy a tax on foods containing more than a government prescribed percentage of the daily minimal fat in..

  What was cost of goods sold for the year

X Company, a manufacturer, reported the following inventory balance for 2012: What was Cost of goods sold for the year?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd