jibarra3 Posts: 1, Reputation: 1 New Member #1 Oct 24, 2006, 04:19 PM
Question 1:
If 10,000 is deposited in a money market when interest is coumpounded every month at an annual rate of 5%, the total amount accumulated at the end of a 5 years will be?
A) 12,762.82
B) 10,210.08
C) 12,833.59
D) None of these

Question 2:
What would cost to buy a U.S Treasury bill that pays 10,000 after 6 months where the simple annual interest rate is 3.75% ( Round to the nearestcent)
A) 9,625.45
B) 9,812.50
C) 9,815.95
D) None of these

Question 3:
How much should a bank bid on a 500,000 180 day T bill to earn 5.8% simple discount rate? Assume 360 days in a year (Round to the nearest dollar)
A) 485,909
B) 485,500
C) 485,000
D) None of these
 RickJ Posts: 7,762, Reputation: 864 Uber Member #2 Oct 25, 2006, 07:19 AM
Here's a TVM calculator for questions like that:
http://www.tcalc.com/tvwww.dll?User?...stm=frs_invest
 tharu Posts: 1, Reputation: 1 New Member #3 Nov 17, 2006, 08:57 AM
1. Ans(a);
Use da equ. : cumulative amount=initial val*int rate^periods.
the int. rate given is annual 10000*(1.05^5).
2. Ans(c);
Apply x(1+n*r)=current value; where x initial cost,n= no of periods,r=rate
i.e x(1+1/2*.0375)=10000;
x(1.018... )=10000;
3. No idea??
 CaptainForest Posts: 3,645, Reputation: 393 Ultra Member #4 Nov 17, 2006, 03:21 PM
Question 1: 10,000 x 1.055 = 12,762.82 OR ANSWER A

Question 2:
variable x 1.0375 /2 = 10,000
variable x 1.01875 = 10,000
variable = 10,000 / 1.01875
variable = 9,815.95

Question 3:
5.8% rate for 180 days out of 360 days (50%)
Therefore rate of 5.8/2 = 2.9%

variable x 1.029 = 500,000
variable = 500,000 / 1.029
variable = 485,908.65 = 485,909

 Question Tools Search this Question Search this Question: Advanced Search

## Check out some similar questions!

Help w/ bonds and interest on them [ 3 Answers ]

You don't have to give me the answer if you don't want, I would really appreciate knowing how to figure this problem out. Doran Co. issued \$40 million face amount of 11% bonds when market interest rates were 11.14% for bonds of similar risk and other characteristics. A. How much interest will...

Question on cd interest [ 5 Answers ]

How could I figure out the monthly yied(interest on my investment) on say a 9 or 6 month cd that is paying 5.35% Lets say for a 25k investment Am I correct by doing this: 25,000 x .0535 = 1337.50 1337.50/12= 111.45 a month income?? thanks in advance, harvey

Controlling interest [ 4 Answers ]

Good morning, I have established a corporation as a parent company. What I would like to do is now establish a real estate investing company up under this corporation as an LLC. I intend on going into business with another person who does carpentry type work. If we have a business fall out, with...

Interest Revenue [ 2 Answers ]

Globo company accepted a \$8000. Interest-bearing note receivable from a client on July 1. The note requires payment of 12% annual interest, and both the principal amount of the note and the interest will be due six months later, on Dec.31. If financial statements are prepared at the end of July,...

Bank interest [ 3 Answers ]

The interest my bank is paying is pitiful. I have heard that there are online banks which give a much higher percentage than what I am receiving locally. How does one find a reliable bank like that and how would I get started? We invested in a Federal Agency step up note<?> which is paying 3+%...