Essay about Fin221 Preflight

Option 2: A 15-year fixed rate mortgage with two points and an APR of 4.5%, compounded monthly.

What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?

10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?

Therefore the annual interest rate is 8% and the effective annual rate compounded quarterly is 8.24%

Interest earned now can be found from getting the difference between the principal and amount.

2. If you had a payment that was due you in 5 years for $50,000 and you could earn a 5% rate of return, how much

Your bank account pays a 6% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?

3. Assume that 11% is the market rate of interest in on January 1, 1975. Compute the present value at January 1, 1975 of all payments that will be made on

What is the present value of $7,540 to be received at the end of each of 18 periods, discounted at 5% compound interest?

The interest rate expressed as if it were compounded once per year is called the _____ rate.

1. (TCO 3) Tim needs to borrow $5,000 for two years. The loan will be repaid in one lump sum at the end of the loan term. Which one of the following interest rates is best for Tim?

17. You have been told that you need $21,600 today in order to have $100,000 when you retire 42 years from now. What rate of interest was used in the present value computation? Assume interest is

After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.

Refer to question 9. What would the future value be if interest is compounded monthly?

1. $5,500 deposited four years ago has grown to $7,000. What semiannual compounded rate of interest