Find what is the effective annual interest rate

Assignment Help Financial Accounting
Reference no: EM132522993

Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years.

Required:

Question a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years?

 

Question b) How much money do you have in your account today?

 

Question c) If you wish to have $85,000 now, how much should you have invested 15 years ago?

Reference no: EM132522993

Questions Cloud

Determine the weights of the assets in rachel portfolio : Determine the weights of the assets in Rachel's portfolio. Calculate the geometric average return of the portfolio for this period.
Components of the criminal justice system : Write a paper in which you evaluate past, present, and future trends of the criminal justice component you select.
Recorded for each member of the two groups : A group of 40 subjects was divided into two groups with one group given an energy drink and one group given water. The subjects were then given
Compute the gross income subject to progressive tax : Corazon resigned in 2015 after 12 years of service. She had the following income during the year: Compute the gross income subject to progressive (regular) tax
Find what is the effective annual interest rate : If you wish to have $85,000 now, how much should you have invested 15 years ago? What is the effective annual interest rate
Determine which project should the company select : Determine Which project should the company select if the interest rate is 14% at the cash flows in Project B is also at the beginning of each year?
What is the total exclusion from gross income : A non-stock, non-profit charitable entity received the following during 2019: What is the total exclusion from gross income subject to regular tax
Training accident involving police and sheriffs : Locate an internet news report of a training accident involving police/sheriffs in your city or county(Dekalb County/Decatur Georgia) that occurred in 2013-2014
Compute the total amount to be included in gross income : Mr. Dimataling was hurt in a bus accident. He received a total indemnity of P800,000. Compute the total amount to be included in gross income

Reviews

Write a Review

Financial Accounting Questions & Answers

  Illustrate what should the company establish as the sales

Illustrate what should the company establish as the sales price per unit if it sets a target of earning an operating income of $260,000 by producing and selling 50,000 units during the first year of operations?

  List the three main types of business activities

List the three main types of business activities on the statement of cash flows and give an example of each.

  Prepare the journal entry

On January 1, 2016 Nezcorp borrows money on a 1-year 12% (stated rate = market rate) $10,000,000 interest-only note payable. Payments are made monthly. bond pays semi-annual interest i. Prepare the journal entry on January 1, 2016.

  Calculate the net cash provided by operating activities

Selected current assets and current liabilities to calculate the net cash provided or used by operating activities using the direct method.

  Compute the net cash provided used by operating activities

Compute the Net Cash Provided used by Operating activities, Net Cash Used provided by Investing activities and Net Cash Used provided by Financing activities.

  What are the tax consequences to euclid

What are the tax consequences to Euclid from the following independent events. Euclid bought 500 shares of common stock five years ago for $94,000. This year, Euclid receives 20 shares of common stock as a nontaxable stock dividend.

  Calculate the earnings of justin brimer operating

Justin Brimer owns his own taxi, for which he bought a $24,000 permit to operate two years ago. Mr. Brimer earns $35,000 a year operating as an independent but has the opportunity to sell the taxi and permit for $82,000 and take a position as dispatc..

  Control risk over cash disbursements

Your preliminary assessment of control risk over cash disbursements is low. You base this assessment on the requirements that each cash disbursement be supported by a purchase requisition, a properly approved purchase order, an approved vender list, ..

  Determine ordinary annuity versus annuity due

What is the future value of a 7%, 5-year ordinary annuity that pays $200 each year? Round your answer to the nearest cent. Find Future Value

  Prepare journal entry for exercise of option

Prepare journal entry for exercise of option and expiry of option. Prepare the journal entries for the years 20X5 to 20X7. how to calculate exercise of option

  Determine the taxpayers current-year economic income

Determine the taxpayer's current-year (1) economic income and (2) gross income for tax purposes from the following events.

  Current market value of the firm

What is the current market value of the firm? What will the firm's market value be after the announcement of the new debt issue? (Note that total market value of debt will be D0 + D1 and the interest costs that must be subtracted from EBIT when ca..

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!

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