Value at maturity if the interest is reinvested in deposit

Assignment Help Financial Management

Reference no: EM13942191

A person places $5,000 in a certificate of deposit that matures in 20 years and pays annual interest rate of 3%. What will be the value at maturity if the interest is reinvested in the deposit? a. How much interest will accumulate after 20 years? b. How much would they receive annually if they chose not to reinvest the interest and what would be the total interest paid out over 20 years? c. Why are answers a and b different?

Reference no: EM13942191

Questions Cloud

The firm has started marketing its new product : The firm has started marketing its new product at a price of $25.00 per unit; however, the average variable cost of the product is $30.00.

Treasury bills have produced the returns : Over the past 4 years, large-company stocks and U.S. Treasury bills have produced the returns stated below. Given this information, 1. What are the average rates of return on large-company stocks and Treasury bills? 2. What are the standard deviation..

How to use casscading style sheets to implement my web page. : I need to create links, buttons, and use java scripts. No Equations are involved. Although just alot of code.

Discusses a famous paradox from ancient greece : Our text discusses a famous paradox from ancient Greece, the so-called sorites paradox. The Greeks (as well as many other ancients) were interested in paradoxes because they seemed to present unresolvable logical or mathematical difficulties but whic..

Value at maturity if the interest is reinvested in deposit : A person places $5,000 in a certificate of deposit that matures in 20 years and pays annual interest rate of 3%. What will be the value at maturity if the interest is reinvested in the deposit? How much interest will accumulate after 20 years?

Required to keep contribution margin ratio constant : Consider Exercise 12-8-b. How many units of the new product must be sold (if the selling price is $14.00) to breakeven on the new product?

Should the government raise the minimum wage : Do you think Walmart should raise wages to $15/hour to match what labor activists are calling for? Why or why not? Should the government raise the minimum wage and if so, to what level? Please support your answer

Identify the causes of sexual offending : While a great deal of research has been conducted attempting to identify the causes of sexual offending, a general consensus has not been reached. Instead a mix of social, environmental, psychological, and biological factors have been found to con..

Determine temperature of a flat piece of the coated aluminum : Determine the equilibrium temperature of a flat piece of the coated aluminum that is exposed to solar irradiation, GS = 1368 W/m2 on its upper surface. The opposite surface is insulated.

User Account

All Pages