assignment 4.3.docx - Time Value of Money Present Value...

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Time Value of Money Present Value Cash Flow and EAR1.If Cathy deposits $12,000 into a bank account that pays 6% interest compounded quarterly, whatwill the account balance be in seven years?A.18,001B.18,207C.19,112D.19,344
2.A certificate of deposit that pays 9.8% compounded monthly is better than a similar certificate ofdeposit that pays 10% compounded only once per year.
3.What is the monthly rate of interest that will yield an annual effective interest rate of 12 percent?
4.Cindy wants $2.5 million for her retirement at age 65. Cindy is 25 years old today and plans todeposit equal amounts each year starting on her 26thbirthday and ending on her 65thbirthday. Ifher investments earn 6% per year, how much must each deposit be to the nearest dollar?
5.You wish to accumulate $10,000 by depositing $481.46 per month into a savings account thatearns 4.75% compounded monthly. How many monthly deposits must you make?
6.You borrow $25,000 to buy a car, and agree to make 48 monthly payments of$607.39 to repay the loan. What annual rate of interest, which is being compoundedmonthly, are you being charged?

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Term
Spring
Professor
Cooney

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