How much must a person put into the bank today if he wants $50000 in 5 years at 6% compounded annually?
Answer and Explanation:
Answer. To have $50,000 in 5 years at a 6% interest rate, a person needs to put $37,365 into the bank today for annual compounding and $37,205 for semi-annual compounding. Therefore, the correct answer for part (a) is $37,205.
You simply take 72 and divide it by the interest rate number. So, if the interest rate is 6%, you would divide 72 by 6 to get 12. This means that the investment will take about 12 years to double with a 6% fixed annual interest rate.
You would need to deposit $7007.08 to have $12000 in 6 years.
Answer and Explanation:
Hence, it will take 12.75 years to triple your money at a 9% interest rate.
Expert-Verified Answer
The future value of $1250 after 5 years at 6% APR compounded annually is approximately $1618.
Rounding to 2 decimal places, we find that P ≈ $612.79. Therefore, you would need to deposit approximately $612.79 in the account to have $2250 after 17 years with a 6% interest rate compounded quarterly.
t=72/R = 72/6 = 12 years
What interest rate do you need to double your money in 10 years?
| Year | Starting Balance | Cumulative Interest |
|---|---|---|
| 1 | $5,000 | $237 |
| 2 | $7,037 | $557 |
| 3 | $9,157 | $964 |
| 4 | $11,364 | $1,460 |
Answer and Explanation:
The expression for the compound interest amount for continuously compounding. Substitute the known values. Thus it will take 11.55 year.
How long will it take to increase a $2200 investment to $10,000 if the interest rate is 6.5 percent?
Final answer:
It will take approximately 15.27 years to increase the $2,200 investment to $10,000 at an annual interest rate of 6.5%.
If you were to place $500,000 in a high-yield savings account with a 2.15% APY and wait one year, you will have earned $10,750 in interest. This rate is likely insufficient to keep up with annual inflation, which means your money will become less valuable at a higher rate than when it's accruing interest.
Final answer: The present value of an annuity formula is used to calculate that you will need approximately a. $756,000 at retirement to withdraw $60,000 per year for 20 years from an account earning 8% compounded annually.
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
Substituting the given values, we have: 9000 = 4000(1 + 0.06/4)^(4t). Solving for t gives us t ≈ 6.81 years. Therefore, it will take approximately 6.76 years to grow from $4,000 to $9,000 at a 7% interest rate compounded monthly, and approximately 6.81 years at a 6% interest rate compounded quarterly.
Safe assets such as U.S. Treasury securities, high-yield savings accounts, money market funds, and certain types of bonds and annuities offer a lower risk investment option for those prioritizing capital preservation and steady, albeit generally lower, returns.
To calculate how long it will take for $5000 to grow to $8000 with an annual compound interest rate of 7.5%, we use the compound interest formula, and solve for time 't', which is approximately 6.5 years. Therefore, the correct answer is option c. 6.5 years.
Answer and Explanation:
It takes 15 years. Suppose it takes T years to grow the asset from 500 to 1039.5 at 5% annual rate, then we must have 500 ∗ ( 1 + 5 % ) T = 1039.5 , which yields T = 15.
| Annual Rate | Actual Years | Rule of 69.3 |
|---|---|---|
| 3% | 23.45 | 23.1 |
| 4% | 17.67 | 17.33 |
| 5% | 14.21 | 13.86 |
| 10% | 7.27 | 6.93 |
How much interest does $30,000 earn in a year?
You can earn more interest and boost your bank account balance by keeping extra savings in a high-yield savings account. If you keep $30,000 in a high-yield savings account for one year at 4.50% APY, you can make $1,350 in interest.
Summary: An investment of $10000 today invested at 6% for five years at simple interest will be $13,000.
t = ln(100,000/5,000)/0.097 ≈ 12.35 years Using the formula for continuous compounding interest, it will take approximately 12.35 years for a $5,000 investment to grow to $100,000 at an interest rate of 9.7% compounded continuously.
Let's look at how much you could make by depositing $1,000 into accounts with various ranges: After one year with a regular account at 0.43%: $1,004.30. After one year with a high-yield account at 4.50%: $1,045.00. After one year with a high-yield account at 5.00%: $1,050.00.
Expert-Verified Answer
Final answer: To reach $7,500 with an 8% interest rate, it would take approximately 9.7 years. Using a calculator, we find that time is approximately 9.7 years.
