Fp 101 Week 5
Time Value of Money
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.
2. Change the interest rate to a higher rate. How much will you have at the end of four years if interest is compounded annually at a rate of 3%? How much would you have at the end of four years if interest is compounded semiannually? 5,627.54 is what it would be at a 3.0 intrust rate anualy.5, 634.96 is what it would be with intrust semiannually at a 3% rate.
3. 3. Now change the interest rate to a lower rate. How much will you have at the end of four years if interest is compounded annually at a rate of 2%? How much would you have at the end of four years if interest is compounded semiannually? 5,412.16 at 2% compound intrust rate annually.5, 415.00 would be Simi annually at that intrust rate.
4.
You have $10,000 in credit card debt, at a 14% interest rate. When is it beneficial to pay off the debt vs. putting money in a savings account? Explain the pros and cons of either option, and in what ways the lessons from the savings account steps affect your conclusions. I believe that the sooner you can pay off your debit with the 14% in trust rate the better off you are. You can use the savings account to save up the payments so that the money you are saving is gaining intrust and that is something that is great and will help you with the amount you will pay on the
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.
2. Change the interest rate to a higher rate. How much will you have at the end of four years if interest is compounded annually at a rate of 3%? How much would you have at the end of four years if interest is compounded semiannually? 5,627.54 is what it would be at a 3.0 intrust rate anualy.5, 634.96 is what it would be with intrust semiannually at a 3% rate.
3. 3. Now change the interest rate to a lower rate. How much will you have at the end of four years if interest is compounded annually at a rate of 2%? How much would you have at the end of four years if interest is compounded semiannually? 5,412.16 at 2% compound intrust rate annually.5, 415.00 would be Simi annually at that intrust rate.
4.
You have $10,000 in credit card debt, at a 14% interest rate. When is it beneficial to pay off the debt vs. putting money in a savings account? Explain the pros and cons of either option, and in what ways the lessons from the savings account steps affect your conclusions. I believe that the sooner you can pay off your debit with the 14% in trust rate the better off you are. You can use the savings account to save up the payments so that the money you are saving is gaining intrust and that is something that is great and will help you with the amount you will pay on the