Money and Points
You submitted this Assignment on Sun 10 Feb 2013 2:33 AM PST. You got a score of 50.00 out of 100.00. You can attempt again, if you'd like.
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Top of Form
Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars without decimals and all interest rates with up to two decimals. Read the syllabus for examples. The points for each question are listed in parentheses at the start of the question, and the total points for the entire assignment adds up to 100.
Question 1
(5 points) Qin deposits his first paycheck in the bank. The annual interest rate is 12%, but interest is compounded quarterly. The EAR is: Your Answer | | Score | Explanation | 12.55 | ✔ | 5.00 | Correct. You know compounding and how to calculate EAR. | Total | | 5.00 / 5.00 | |
Question Explanation
Basics of compounding; mechanics.
Question 2
(5 points) Ranjit began setting aside $6,000 per year in a mutual fund at the age of 25. He has turned 34, and has just made a deposit. The mutual fund has returned 6.5% annually. How much does Rajit have in his account today? Your Answer | | Score | Explanation | 80967 | ✔ | 5.00 | Correct. You know how to calculate the FV of an annuity. | Total | | 5.00 / 5.00 | |
Question Explanation
Basic FV calculation. He should have a minimum of $60,000. Why?
Question 3
(5 points) Dominique has just turned 65 and she has deposited her annual payment of $20,000 into her retirement account. She made her first such saving deposit into this fund on her 35th birthday. Dominique has also retired and wants to figure out how much money she has in her retirement account for her retired life. You are Dominique's friend who knows finance. How much is Dominique's savings worth today given that the fund has earned an annual return of 5.5%? (Enter just the number without the $
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Top of Form
Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars without decimals and all interest rates with up to two decimals. Read the syllabus for examples. The points for each question are listed in parentheses at the start of the question, and the total points for the entire assignment adds up to 100.
Question 1
(5 points) Qin deposits his first paycheck in the bank. The annual interest rate is 12%, but interest is compounded quarterly. The EAR is: Your Answer | | Score | Explanation | 12.55 | ✔ | 5.00 | Correct. You know compounding and how to calculate EAR. | Total | | 5.00 / 5.00 | |
Question Explanation
Basics of compounding; mechanics.
Question 2
(5 points) Ranjit began setting aside $6,000 per year in a mutual fund at the age of 25. He has turned 34, and has just made a deposit. The mutual fund has returned 6.5% annually. How much does Rajit have in his account today? Your Answer | | Score | Explanation | 80967 | ✔ | 5.00 | Correct. You know how to calculate the FV of an annuity. | Total | | 5.00 / 5.00 | |
Question Explanation
Basic FV calculation. He should have a minimum of $60,000. Why?
Question 3
(5 points) Dominique has just turned 65 and she has deposited her annual payment of $20,000 into her retirement account. She made her first such saving deposit into this fund on her 35th birthday. Dominique has also retired and wants to figure out how much money she has in her retirement account for her retired life. You are Dominique's friend who knows finance. How much is Dominique's savings worth today given that the fund has earned an annual return of 5.5%? (Enter just the number without the $