In this question, give all answers correct to two decimal places Sam invests $1700 in a saving account that pays a nominal annual rate of interest of 2.74 compounded half-yearly. Sam makes no further payments to, or withdrawals from, this account. (a) Find the amount that Sam will have in his account after 10 years. P= $1700 FV=PVX (1+r) kn 100k r = 2.74% n = 10 years V=2 Fv = 1700x (1 + (0.0274/2/20 Fv = 1700 (1.0137) 20 Fv-22-31.71 David also invests $1700 in a savings account that plays an annual rate of interest of r%, compounded yearly. David makes no further payments or withdrawals from this account. (b) Find the value of 'r' required so that the amount in David's account after 10 years will be equal to the amount in Sam's account. P = $700 r = 2.74% n = 10 years K= (c) Find the interest David will earn over the 10 years. Simel

In this question, give all answers correct to two decimal places Sam invests $1700 in a saving account that pays a nominal annual rate of interest of 2.74 compounded half-yearly. Sam makes no further payments to, or withdrawals from, this account. (a) Find the amount that Sam will have in his account after 10 years. P= $1700 FV=PVX (1+r) kn 100k r = 2.74% n = 10 years V=2 Fv = 1700x (1 + (0.0274/2/20 Fv = 1700 (1.0137) 20 Fv-22-31.71 David also invests $1700 in a savings account that plays an annual rate of interest of r%, compounded yearly. David makes no further payments or withdrawals from this account. (b) Find the value of 'r' required so that the amount in David's account after 10 years will be equal to the amount in Sam's account. P = $700 r = 2.74% n = 10 years K= (c) Find the interest David will earn over the 10 years. Simel

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

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