MATH HELP

posted by .

Ben Garrison invested $15,000 at 5% compounded daily in a credit union account that matures in 1 year. He also invested 20000 at 5.25% compounded monthly in a Silver Screen account that matures in 4 years. (a) What is the interest earned at maturity for both accounts? (b) What is the annual percentage yield for each account?

  • MATH HELP -

    credit union investment
    = 15000(1 + .05/365)^365 = $15,769.01

    silver screen account
    = 20000(1 + .0525/12)^12
    = 21,075.64

    total after 1 year = 36,844.65 on an investment of 35,000

    To make any comparison, we have to evaluate at the same "time spot".
    thus a) is not a valid question, we cannot compare the interest at the end of year 1 with that at end of year 4

    b)
    so 35000(1+i) = 36844.65
    1+i = 1.0527

    the equivalent annual rate is 5.27%

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Math

    Please check my work, thank you If $7,800 is deposited into an account paying 6% interest compounded annually (at the end of each year), how much money is in the account after 2 years?
  2. finance

    Today, Mark invested $5,000 into an account that guarantees 7.50% p.a., compounded monthly and Madonna invested $5,000 into account guaranteeing 8.125% p.a., compounded quarterly. How long will it take (in years) for the value of Madonna's …
  3. finance

    Today, Mark invested $5,000 into an account that guarantees 7.50% p.a., compounded monthly and Madonna invested $5,000 into account guaranteeing 8.125% p.a., compounded quarterly. How long will it take (in years) for the value of Madonna's …
  4. Math

    suppose that $5000 is invested in an account with APR of 12% compounded monthly. find the future value of the account in 5 years.
  5. Math

    Suppose $3500 is invested in an account with an APR of 11% compounded monthly. Find the future value of the account in 3 years.
  6. Math 111

    Suppose that $5000 is invested in an account with an account with an APR of 12% compounded monthly. Find the future value of the account in 5 years.
  7. Algebra ASAP

    Suppose that $17,000 is invested in a savings account paying 5.1% interest per year. (a) Write the formula for the amount A in the account after t years if interest is compounded monthly. A(t) = (b) Find the amount in the account after …
  8. MATH

    Ben Garrison invested $15,000 at 5% compounded daily in a credit union account that matures in 1 year. He also invested 20000 at 5.25% compounded monthly in a Silver Screen account that matures in 4 years. (a) What is the interest …
  9. PreCalc

    Suppose that $14,000 is invested in a savings account paying 5.2% interest per year. (a) Write the formula for the amount A in the account after t years if interest is compounded monthly.
  10. finance

    Find the final amount in the following retirement account, in which the rate of return on the account and the regular contribution change over time. $470 per month invested at 5%, compounded monthly, for 7 years; then $709 per month …

More Similar Questions