Homework answers / question archive / ST 2 Time Value Of Money It is now January 1,2012, and you will need $1,000 on January 1, 2016, in 4 years

ST 2 Time Value Of Money It is now January 1,2012, and you will need $1,000 on January 1, 2016, in 4 years

Finance

Share With

ST 2 Time Value Of Money It is now January 1,2012, and you will need $1,000 on January 1, 2016, in 4 years. Your bank compounds interest at an 8% annual rate. e. Suppose you can deposit only $200 each January 1 from 2013 through 2016 (4 year). What interest rate, with annual compounding, must you earn to end up with $1,000 on January 1, 2016 ? f. Your father offers to gave you $400 on January 1, 2013. You will then make six additional equal payments each 6 months fromm July 2013 through January 2016. If your bank pays 8% compounded semiannually, how large must each payment be for you to end up with $1,000 on January 1, 2016 ? g. What is the EAR, or EFP %, earned on the bank account in Part f ?. what is the APR earned on the account ?.

Answer Part e with complete solution!