1) Assume you have 8000 to deposit today. Roten Bank offers 12% per year compoun
ID: 2372029 • Letter: 1
Question
1) Assume you have 8000 to deposit today. Roten Bank offers 12% per year compounded monthly (1% per month). Brooke Bank offers 12% compounded annually. How much will your investment be worth in 10 years at each bank?
2) Suppose you borrow $10000. You plan to repay the loan by making equal annual payments for 5 years - the first payment will be made one year from today. The interest rate on the loan is 14% per year. How much interest expense will you pay over the life of the loan?
3) An investment offers to pay you $6000 a year for 15 years. The first paymane will occur 1 year from today. If the required return is 8%, what is the value od the investment? What would the value be if the payments occurred for 40 years? What would the value be in the payments occurred indefiniately?
Explanation / Answer
At Regency Bankfinal amount=9000(1+1/100)^12*20=98032.98$At King Bankfinal amount=9000(1+12/100)^20=86816.63 $
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.