« previous next »

Author Question: Joan is diligent and, starting on her 19th Birthday, she deposits 1,000 in a bank account that pays ... (Read 50 times)

naturalchemist

  • Hero Member
  • *****
  • Posts: 542
on: Jul 10, 2018
Joan is diligent and, starting on her 19th Birthday, she deposits 1,000 in a bank account that pays an interest rate of 10. She continues to save for six more years culminating on her 25th birthday.
 
  After that birthday she stops saving but leaves her accumulated savings in a bank account for 40 years (to age 65). Roseanne is a partier and doesn't start saving until her 26th birthday, at which time she starts saving 1,000 a year until her 65th birthday. (Assume that Roseanne also earns a rate of 10.) Who has more at age 65?
  A) Roseanne
  B) Joan
  C) They will have the same amount of money.

Question 2

Given the following cash flows, what is the future value at year six when compounded at an interest rate of 8.0?
 
  Year 0 2 4 6
  Cash Flow 5,000 7,000 9,000 11,000
 
  A) 38,955.39
  B) 56,687.43
  C) 42,074.42
  D) 32,000.00


rachel

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

Answer: A
Explanation: A) FV =  PV  (1 + r)n = 5,000  (1.08)6 + 7,000  (1.08)4 + 9,000  (1.08)2 + 11,000  (1.08)0 = 38,955.39.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Pupil Assessment, Starting Position with Penlight to Side of Pupil Pupil Assessment, Starting Position with Penlight to Side of Pupil
Example of Reconciling a Bank Statement Cont. Example of Reconciling a Bank Statement Cont.
Double-check for any oil or vacuum leaks after starting the engine. Double-check for any oil or vacuum leaks after starting the engine.
How to solve a linear algebraic bank interest problem with two unknowns How to solve a linear algebraic bank interest problem with two unknowns
If you are able to earn 6.2% compounded semi-annually in an account, how long will it take for ... If you are able to earn 6.2% compounded semi-annually in an account, how long will it take for ...
Piggy bank Piggy bank
Video: Introduction to Tuberculosis

For a complete list of videos, visit our video library