Natalia makes a deposit of $2,000 into a savings account at the end of the 1st year and another one in the same amount at the end of the 3rd year. Manuel makes a deposit of $2,000 at the end of the 2nd year and another one in the same amount at the end of the 4th year. The effective annual interest rate on both investments is 10%. Determine by how much the accumulated amount in Natalia's account exceeds the accumulated amount in Manuel's account at the end of 5 years right after interests have been applied.

Natalia makes a deposit of $2,000 into a savings account at the end of the 1st year and another one in the same amount at the end of the 3rd year. Manuel makes a deposit of $2,000 at the end of the 2nd year and another one in the same amount at the end of the 4th year. The effective annual interest rate on both investments is 10%. Determine by how much the accumulated amount in Natalia's account exceeds the accumulated amount in Manuel's account at the end of 5 years right after interests have been applied.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 15E

See similar textbooks

Similar questions

Erica borrowed money from Charles an amount of 58,744 and promise to pay at the end of second and fourth year at a simple interest rate of 15.198%. The second payment is 30% more than the first one. How much is the first payment? How much is the second payment?
1) Alisha invests 5,000 into an account. The effective monthly interest rate is .25% for the first six months, .5% for the next year, and .75% for the next six months. Find the amount Alisha has in the account after two years, and find the average compound monthly interest rate (i.e. the equivalent effective monthly interest rate) for the two year period. Finally, find the average yearly interest rate (i.e. the equivalent effective annual interest rate) for the two year period.
Eric deposits X into a savings account at time 0 that pays interest at a nominal rate of i, compounded semiannually. Mike deposits 2X into a different savings account at time 0 that pays simple interest at an annual rate of i. Eric and Mike earn the same amount of interest during the last six months of the 8th year. Calculate i.
Walter is investing $5,000in an account paying 6.75 percent annually for three years. What is the interest-on-interestif interest is compounded?Hint: Find the interest earned using compound interest and simple interest. The difference between them isyour answer.
Imelda opens a savings account with $12,000, which pays an annual interest rate of 7.8%. If she reinvests the generated interest every month and also deposits $2,300 each month, how much will be in the account after 2 years? The interest is reinvested on the same day as the $2,300 deposit. Otions: 69177.89 71052.15 73548.61 70524.79
Starting today, Barbie and Ken each make deposits at the end of every year for 15 years. Barbie deposits 75t at the end of year t, while Ken deposits K(16 − t) at the end of year t. Both Barbie and Ken have accumulated the same amount after 15 years. If the annual effective interest rate is 5%, find K.
Starting from today, Susan deposits $1500 into a saving account A at the beginning of every year for 6 years. At the end of each year, just after interest is credited to the account, she withdraw the interest from the saving account A and deposit the interest into another saving account B. It is given that • The annual nominal interest rate of saving account A is iA = 6% convertible monthly and • The annual nominal interest rate of saving account B is ig = 8% convertible semiannually. Calculate the total value of two saving account at the end of 6th year. Solution
Your sister placed her graduation gifts amounting to P25,000 in a special savings account that provides an interest of 2% for 8 months. Compute the annual interest, total interest, and amount to be received or paid at the end of the term for this scenario using a simple interest assumption and compound interest assumption.
Vincent invested his savings into a Registered Retirement Savings Plan (RRSP) at an interest rate of 3.50% compounded semi-annually. After one year, his investment grew to $24,600; however, the interest rate on the RRSP changed to 3.75% compounded quarterly and remained constant for the next two years. a. Calculate the original amount he invested into the RRSP. $ $0.00 Round to the nearest cent b. Calculate the accumulated value of the investment at the end of three years (two years after the rate change). $ $0.00 Round to the nearest cent
Carla borrowed money to bank and she pays equal 3,500 every end of a quarter for 3 years with an interest rate of 6% every year. Find the following; a. future value of ordinary annuity b. present value of ordinary annuity c. future value of annuity due d. present value of annuity due
Deepika deposits $10000 into her savings account that earns 7% per annum compounded annually for first two years, 8% compounded semi-annually for next three years and 12% compounded quarterly for the last two years. (i) Find the accumulated amount at the end of the first five years. (ii) Find the accumulated amount at the end of seven years. b) Pathum deposits 100000 rupees which compounded annually with interest rate i per annum. If the total amount doubles after 6 years find the value of i. (Hint: Use the formula R = P(l + i)t )
Maria deposits $2,000 in a savings account that pays interest at an annual compound rate of 3%. Two years after the deposit, the interest rate increases to 4% compounded annually. A second deposit of $3,000 is made immediately after the interest rate changes to 4%. How much will be in the fund 7 years after the second deposit?