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Lostsunrise [7]
3 years ago
10

2. If the interest rate on a savings account is 0.018%, approximately how much money do you need to keep in this account for 1 y

ear to earn enough interest to cover a single $9.99 Below-Minimum-Balance Fee?
Business
1 answer:
MA_775_DIABLO [31]3 years ago
7 0

The interest from an investment is calculated through the equation,

    I = P x i

Where I is the interest, P is the principal amount and i is the interest rate.

   P = I / i

Substituting the known values,

   P = ($9.99) / (0.018/100) = $55,500

The answer to this item is therefore approximately $55,500. 

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At the end of every 3 months, Teresa deposits into an account that pays 5% compounded quarterly. After she puts the accumulated
NikAS [45]

Answer:

The amount Teresa will have accumulated when this certificate matures is $2,452.16.

Explanation:

Note: This question is not complete as some important data are omitted. The complete question is therefore provided before answering the question as follows:

At the end of every 3 months, Rita deposits $100 into an account that pays 5% compounded quarterly. After 5 years, she puts the accumulated amount into a certificate of deposit paying 8.5% compounded semiannually for 1 year. When this certificate matures, how much will Teresa have accumulated?

The explanation of the answers is now provided as follows:

Step 1: Calculation of accumulated amount after 5 years.

Since the deposits are paid at the end of every 3 months, the accumulated amount after 5 years can be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:

FV5 = P * (((1 + r1)^n1 - 1) / r) ................................. (1)

Where,

FV5 = Future value or accumulated amount after 5 years = ?

P = Quarterly deposit or deposit at the end of every 3 months = $100

r = Quarterly interest rate on the account = Interest rate on the account / Number of quarters in a year = 5% / 4 = 0.05 / 4 = 0.0125

n = number of quarters = 5 years * Number of quarters in a year = 5 * 4 = 20

Substituting the values into equation (1), we have:

FV5 = $100 * (((1 + 0.0125)^20 - 1) / 0.0125) =  $2,256.30

Therefore, the accumulated amount after 5 years is $2,256.30.

Step 2: Calculation of the amount Teresa will have accumulated when this certificate matures.

This can be calculated using the simple future value (FV) as follows:

FVM = FV5 * (1 + R)^N ……………………… (2)

FVM = Accumulated amount at maturity = ?

R = semi-annual interest rate on certificate of deposit = Interest rate on certificate of deposit / Number of semiannuals in a year = 8.5% /2 = 0.085 / 2 = 0.0425

N = number of semiannuals = 1 year * Number of semiannuals in a year = 1* 2 = 2

Substituting the values into equation (2), we have:

FVM = $2,256.30 * (1 + 0.0425)^2 = $2,452.16

Therefore, the amount Teresa will have accumulated when this certificate matures is $2,452.16.

3 0
3 years ago
pJimmy is a client of yours and he has some holdings in U.S. T-Bonds. Over the past year, he received $500 in interest from thes
Firdavs [7]

Answer:

Jimmy must pay federal income taxes for the $500 earned in dividends during last year = $500 x 28% = $140

Since interest earned on federal securities are not taxed by state or local governments, there is no state tax liability.

Jimmy's total taxes due from dividends earned = $140

5 0
3 years ago
Which of the following institutional structures promote and sustain modern economic growth? Multiple select question. Patents an
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6 0
2 years ago
On April 1, 2016, Cyclone's Backhoe Co. purchases a trencher for $284,000. The machine is expected to last five years and have a
harkovskaia [24]

Answer:198,800usd by the end of 2016

119,280usd by the end of 2017

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2017 12 months depreciation rate 40%. Then 198800*40%=79520.

198800-79520=119280

3 0
3 years ago
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