Compound interest with non-annual periods

Assignment Help Financial Management

Reference no: EM131847899

(Compound interest with non-annual periods). You just received a bonus of $2000.

a. Calculate the future value of $2000, given that it will be held in the bank for 8 years and earn an annual interest rate of 7%.

b. Recalculate part (a) using a compounding. That is (1) semiannual and (2) bimonthly.

c. Recalculate parts (a) and (b) using an annual interest rate of 14%.

d. Recalculate part (a) using a time horizon of 16 years in at an annual interest rate of 7%.

What conclusions can you draw when you compare their answers and parts (c) and (d) with the answers in parts (a) and (b)?-------

a. What is the future value of $2000 in a bank account for 8 years and an annual interest rate of 7%? $_______.

b. What is the future value of $2000 in a bank for 8 years at 7% compounded semiannually? $______.

What is the future value of $2000 in a bank account for 8 years at 7% compounded bimonthly? $______.

c. What is the future value of $2000 in a bank account for 8 years at an annual interest rate of 14%? $_______.

What is the future value of $2000 in a bank account for 8 years at 14% compounded semiannually? $______.

What is the future value of $2000 in a bank account for 8 years at 14% compounded bimonthly? $_______.

d. What is the future value of $2000 in a bank account for 16 years at an annual interest rate of 7%? $_______.

Reference no: EM131847899

Questions Cloud

Calculate the expected return for each portfolio : calculate the expected return for each portfolio? rank the portfolios in increasing order of expected risk?

The firm break even point in terms of units : The Majestic Blind Company sells its only product for $35 per unit with a variable cost per unit of $21. The firm’s break even point in terms of units.

Focuses on international business : Articles may be found in the International section of any reputable website that focuses on international business,

What stock price will the investor receive margin call : An investor decides to purchase shares of BUFF on margin. Below what stock price will the investor receive a margin call?

Compound interest with non-annual periods : Calculate the future value of $2000, given that it will be held in the bank for 8 years and earn an annual interest rate of 7%.

What annual rate of return is earned : What annual rate of return is earned on a $1,000 investment when it grows to $2,600 in seven ye

What is the nominal annual interest rate : what is the nominal annual interest rate?

Traditional pension plan : A recent college graduate has taken a new job at Work LLC, and since the company does not offer a traditional pension plan,

Interest compounded monthly : You’re prepared to make monthly payments of $330, beginning at the end of this month, into an account that pays 7.4 percent interest compounded monthly.

User Account

All Pages