optionals - chap 5

optionals - chap 5 - Chapter 05 _ 1. Alpha Bank pays...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 05 ________ 1. Alpha Bank pays interest of 4 percent compounded annually. Beta Bank pays 4 percent simple interest. Which one of the following statements is true if you invest $1,000 in each bank for five years? a. Alpha Bank will pay you a total of $200 in interest over the five years. b. Beta Bank will pay you more interest over the five years than Alpha Bank will. c. Alpha Bank will pay you a total of $216.65 in simple interest. d. Alpha Bank will pay you $16.65 of interest on interest. ________ 2. Martha wants to have $10,000 in her investment account ten years from now. How much does she have to deposit today to achieve her goal if she can earn 8 percent compounded annually? a. $4,631.93 b. $4,665.07 c. $5,259.26 d. $5,589.25 ________ 3. Jim has $1,650 saved today. He wants to buy a different vehicle as soon as he has $3,200 saved. How long does Jim have to wait to get his vehicle if he earns 7.5 percent compounded annually? a. 8.67 years
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/27/2008 for the course FINC 450 taught by Professor Ddavidson during the Spring '08 term at Loyola Chicago.

Page1 / 2

optionals - chap 5 - Chapter 05 _ 1. Alpha Bank pays...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online