lab2121 - monthly or 11 compounded annually for a two-year...

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BTB110 Lab #2 Winter, 2012 – due Thursday, February 2 1. Small claims court has ruled in favour of Mrs. Peacock. She claimed that Professor Plum defaulted on two payments of $1000 each. One payment was due 18 months ago, and the other 11 months ago. What is the appropriate amount for the court to order Plum to pay immediately if the court uses 6% compounded monthly for the interest rate money can earn? 2. Other things being equal, would an investor prefer an interest rate of 10.5% compounded
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Unformatted text preview: monthly or 11% compounded annually for a two-year investment? 3. Frank deposited monthly rent receipts of $250 due at the end of each month in a savings account paying 4.5% compounded monthly for four years. Frank made no further deposits, but left the money in the account. a) What will the balance be 12 full years after he made the first deposit? b) How much of that total will be due to rent? c) How much will be interest?...
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