4. Exactly 6 months from today you deposit $1,200 . Then, exactly 10 months from today you deposit $1,100 . Your account earns annual interest of 8.8% compounded monthly.
There are no other deposits or withdrawals and finally, exactly 16 months from today, you withdraw the entire accumulation. How much total interest did the account earn?
a. $96 b. $116 c. $128 d. $105 e. $140
I got 142 here:
1200(1+ .088/12) to the 10th power= 1291
1100(1+ .088/12) to the 6th power= 1149
1291-1149=142
6. In exactly 10 months a bill of $13,700 is due. Today you deposit money such that if the account earns a target rate of return of 0.86% per month, the bill is perfectly financed.
Unfortunately, your account earns 30 basis points less than your target. When the bill is due, how much money do you lack?
a. $442 b. $589 c. $402 d. $487 e. $535
I got 403 on this one:
13700/(1.0086)to the 10th=12,575
12575(1.0056)to the 10th=13297
13700-13297=403
2007-03-08
07:22:39
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1 answers
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asked by
bamagrad07
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in
Education & Reference
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