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(a) Suppose you invest $500.00 in a fund earning compound interest at 5%. Three years later you withdraw the investment (principal and interest) and invest it in another fund earning 6% simple discount. How much time (INCLUDING THE THREE YEARS earning compound interest) will be required for the original $500.00 to accumulate to $750.00? (two decimal places)

(b) On July 1, 2005 John invests $1,000 in a fund earning simple interest at 3%. On July 1, 2006 John liquidates this investment and invests the proceeds in a fund earning 4% annual compound interest. On January 1, 2008 John liquidates this investment and invests in another fund earning an annual simple discount rate Q . July 1, 2008 the balance is $1,106.24. Find Q

(c) An account is governed by compound interest. The interest for 6 years on $600 is $100. Find the amount of discount for 3 years on $1500.(nearest cent)

(d) Suppose money grows at an annual rate of 0.049% simple interest. How much is needed to invest at time t = 3 to have $313 at time $$t=6?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91948587

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