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Related to Checkpoint 5

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{Related to Checkpoint 5.2} [Future value) Leslie Mosallam, who recently sold her Porsche, placed $8,600 in a savings account paying annual compound interest
of ? percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2r 6, and 16 year(s).
b. Suppose Leslie moves her money into an account that pays 9 percent or one that pays 11 percent. Rework part (3) using 9 percent and 11 percent.
c. What conclusions can you draw about the relationship between interest ratesr time, and future sums from the calculations you just did?

 
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Related to Checkpoint 5

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{Related to Checkpoint 5.?) (Calculating an EAR) Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one—year
maturity and a fixed interest rate. The first certificate of deposit, CD #1, pays 3.95 percent APR compounded monthly, while the second certificate of deposit, CD #2,
pays 4.00 percent APR compounded semiannually. What is the efiective annual rate (the EAR) of each CD, and which CD do you recommend to your grandmother?

 
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Related to Checkpoint

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{Related to Checkpoint 5.4) [Present-value comparison) You are ofiered $100,000 today or $360,000 in 14 years, Assuming that you can earn 14 percent on your
money, which should you choose? If you are offered $360,000 in 14 years and you can earn 14 percent on your moneyr what is the present value of $360,000? $ (Round to 1he nearest cent)

 
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{Related to Checkpoint 5.6} (Solving for i} Lance Murdock purchased a wooden statue of a Conquistador for $7,600 to put in his home office 7 years ago. Lance has recently marriedr and his home office is being converted into a sewing room. His new wife, who has far better taste than Lance, thinks the Conquistador is hideous and must go immediately. Lance decided to sell it on e—Ba}.r and only received $4,800 for itr and so he took a loss on the investment. What was his late of return, that
is, the value of i“? What was Lance Murdock‘s rate 01 return, that is, the value of f? Enter a negative percentage for a loss. % (Round to two decimal places.)

 
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