Answer the following: The conclusion that can be drawn about the frequency of compounding interest is that the more frequency the better. The conclusion that can be drawn about the length of time an amount is compounding is the same the more or longer the better. It just keeps adding up.…
1. You place $5,000 in a savings account earning 2.50% interest compounded annually. Assuming you do NOT make additional monthly deposits (set that to $0), how much will you have at the end of four years? How much would you have at the end of four years if interest is compounded semiannually? 5,524.14 are what will be after four years with Simi annual intrust compound.…
6. The goal of our financial security depends on understanding how money in savings accounts grows in remarkable ways as a result of compound interest. Compound interest is computed on your original investment as well as on any accumulated interest. Complete the table for a savings account subject to 4 compounding periods yearly.…
“First, interest rates are very low. So the value today of retirement income to be paid many years in the future is not as significantly discounted (e.g., at 4% versus 8%).…
3.Would you rather have a savings account that offered simple interest, or an account that offered compound interest? Why?…
1. You are considering various retirement plans. Your goal is to have a lump sum of $3,000,000 available (‘in the bank’) when you retire at age 67. The various plans, with their payment schedules, are listed below. In each case, calculate the payment(s) that must be made into the plan to ensure that you have the $3,000,000 available. For each plan, you may assume that your opportunity cost of funds is 6% per year; for each plan, you may assume that the phrase “at age XX” means the same thing as “on your XX’th birthday”.…
Name________________________________ UDC – Quantitative Reasoning I EXAMINATION 3 – Personal Finance – Exponential Functions Fall - 2012 Instructions: This exam is worth 100 points. Read each question carefully. Answer each question clearly and concisely. Please, show All of Your Work. Remember, I do not believe in magic!!!…
Paste the image of the car including the price below. (*Every student must have a different car and there should be no prices which are exactly the same as any other student in the class. Check with Mr Mellor for approval before proceeding after choosing your car.)…
|Why is time such an important factor in |Time is important because in the long run you end up paying more in interest. |…
1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)…
With so many important aspects in life one of the most important is to save for the future. The best way to do this and most effective way is to create a saving plan. My savings plan starts with choosing the right account. A money market account that yields a higher return is always a good choice. This type of account however usually requires a minimum opening and continuing balance but has a better long-term interest rate (TDECU, 2005-2010). Using a money market account separate from my checking or savings account allows me to stay within a structured budget by keeping that money for my savings goals.…
Two things that will affect your personal beliefs and opinions about financial planning are stepping back and looking at where you are in…
Two examples of important things that financial planning skills can help you do are planning for retirement and creating a budget. Planning for retirement can make for a better and easy future. Planning for retirement will also help you learn how to make investments and save money. Creating a budget will help you not spend more money than you have. Creating a budget will also help you stay out of debt.…
The financial decisions that you make today will either assist or haunt you for many years to come. You need to treat your financial decisions as if you are running a business and remove your personal feelings from the decisions so that you can make clear, concise, and rational financial decisions. By using the tools that you have learned in your textbook thus far, you should be able to leverage the proper financial institution in meeting your investment goals. You should be able to construct a simplified Income Statement for proper financial analysis. You can use this information to create an Income to Debt ratio, which significantly impacts your credit score. You can calculate a true interest rate prior to making any long-term purchases. You should understand how long–term debts are amortized and how your payments effect the principal owed on these debts. And finally, you should understand the Time Value of Money so that you can properly assess the opportunities that you are confronted with (Brigham, 2007).…
retire. People do not realize that the idea of living solely on the benefits of…