What would john have in the bank at the end of three years

Assignment Help Financial Management

Reference no: EM131825184

John deposits $9000 in a bank. During the first year, the bank credits an annual effective interest rate of i. During the second year, the bank credits an annual effective rate of interest (i−4%). At the end of two years, he has 11,524.13 in the bank. What would John have in the bank at the end of three years, if the annual effective rate of interest were (i + 8%) for each of the three years?

Reference no: EM131825184

Questions Cloud

Call option higher when the volatility of underlying stock : Why is the price of a call option higher when the volatility of the underlying stock is higher? Explain.

What is the amount of the net capital spending for the year : The balance sheet of a firm shows beginning net fixed assets of $360,000. What is the amount of the net capital spending for the year?

Covariance between the returns of two stocks : What is the covariance between the returns of two stocks?

What is the required return for this stock : Suppose the market return is 8%, the risk-free rate is 1% and the beta for a given stock is 1.2. What is the required return for this stock?

What would john have in the bank at the end of three years : What would John have in the bank at the end of three years, if the annual effective rate of interest were (i + 8%) for each of the three years?

Instead of labor is likely to have high venture leverage : A firm that invests in lots of fixed assets instead of labor is likely to have high "venture leverage".

Bonds issued elsewhere often have annual coupon payments : Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments.

What is this stream of cash flows worth today : If the cost of capital is 7% what is this stream of cash flows worth today?

Cash flow breakeven measures must account for taxes : While financial and cash flow breakeven measures must account for taxes, accounting breakeven does not. Why?

User Account

All Pages