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garri49 [273]
9 months ago
7

You deposit $2000 into an account that pays 6% compounded monthly. a. How much money will you have in the account after 1 year?

$   b. What is the effective annual yield?   %
Mathematics
1 answer:
Masteriza [31]9 months ago
8 0

We have a deposit of $2000 into an account that pays 6% compounded monthly, after a year we will have:

\begin{gathered} \text{account}_{\text{year}}=2000\cdot(1+\frac{6}{100})^{12} \\ \text{account}_{\text{year}}=4024.4 \end{gathered}

The effective annual yield (EAY) will be:

\text{EAY}=\frac{account_{year}}{2000}-1=\frac{4024.14}{2000}-1=1.0122

The EAY is 101.22%

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A) 0.0009765625

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C) 2.7756 x 10^(-17)

Step-by-step explanation:

A) This problem follows a binomial distribution. The number of successes among a fixed number of trials is; n = 10

If a 0 bit and 1 bit are equally likely, then the probability to select in 1 bit is; p = 1/2 = 0.5

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B) here we are given that p = 0.6 while n remains 10 and k = 10

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Now, the probability for the different bits is independent, so we can use multiplication rule for independent events which gives;

P(x = 10) = P((x_1) = 1)•P((x_2) = 1)•P((x_3) = 1)••P((x_4) = 1)•P((x_5) = 1)•P((x_6) = 1)•P((x_7) = 1)•P((x_8) = 1)•P((x_9) = 1)•P((x_10) = 1)

This gives;

P(x = 10) = [1/(2^(1))]•[1/(2^(2))]•[1/(2^(3))]•[1/(2^(4))]....•[1/(2^(10))]

This gives;

P(x = 10) = [1/(2^(55))]

P(x = 10) = 2.7756 x 10^(-17)

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