| Re: 2 quick questions (calculating interest) [message #396452] |
Di, 11 Juli 2006 20:47 |
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"Claire" wrote
> How much will accumulate in an account with
> an initial deposit of $100, and which earns 10%
> interest compounded quarterly for three years?
> A) $107.69
> B) $133.10
> C) $134.49
> D) $313.84
Now that depends on whether it is
"10% per quarter" or "10% per annum"!
If "10% per quarter", then Joe is right; but
the question setter might be expecting you to
use "10% per annum, compounded quarterly",
in which case the correct answer is:
C) $134.49
"Claire" wrote
> and how much must be invested today in
> order to generate a five-year annuity of
> $1,000 per year, with the first payment one
> year from today, at an interest rate of 12%?
> A) $3,604,78
> B) $3,746.25
> C) $4,037.35
> D) $4,604.78
I can't see where Joe got his answer
here; the correct answer is, of course, :-
A) $3,604,78
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| Re: 2 quick questions (calculating interest) [message #396455 ] |
Di, 11 Juli 2006 21:28 |
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"Tim" <me [at] home.uk> wrote in message news:bLqdnfDWDIP7by7ZRVnysA [at] bt.com...
> "Claire" wrote
>> How much will accumulate in an account with
>> an initial deposit of $100, and which earns 10%
>> interest compounded quarterly for three years?
>> A) $107.69
>> B) $133.10
>> C) $134.49
>> D) $313.84
>
> Now that depends on whether it is
> "10% per quarter" or "10% per annum"!
>
> If "10% per quarter", then Joe is right; but
> the question setter might be expecting you to
> use "10% per annum, compounded quarterly",
> in which case the correct answer is:
>
> C) $134.49
>
> "Claire" wrote
>> and how much must be invested today in
>> order to generate a five-year annuity of
>> $1,000 per year, with the first payment one
>> year from today, at an interest rate of 12%?
>> A) $3,604,78
>> B) $3,746.25
>> C) $4,037.35
>> D) $4,604.78
>
> I can't see where Joe got his answer
> here; the correct answer is, of course, :-
>
> A) $3,604,78
>
hence my 'LOL' they really shouldnt expect that just because you get an
answer on usenet its right ...welcome to wiki_finance_net where the answers
might be correct, but with no workings, how is anyone to know:?
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: 2 quick questions (calculating interest) [message #397522 ] |
Mi, 12 Juli 2006 12:44 |
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"Tumbleweed" wrote
> hence my 'LOL' they really shouldnt expect that just
> because you get an answer on usenet its right ...welcome
> to wiki_finance_net where the answers might be correct,
> but with no workings, how is anyone to know:?
Yep, agreed! And you never
know, I might be wrong ... !! ;-)
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