SOLUTION: I need help!!! thank you to whoever can help me!!!
David had the following investments for 4 years.
*900 monthly deposit at 3% compounded weekly
*9000 deposit into GIC at 4%
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Question 1102597: I need help!!! thank you to whoever can help me!!!
David had the following investments for 4 years.
*900 monthly deposit at 3% compounded weekly
*9000 deposit into GIC at 4% compounded daily
A) For each investment, determine the future value
For A
N= 4
I= 3
PV= 0
PmT= -900
FV= 145955.43
P/Y=12
C/Y= 52
For B
N= 4
I= 4
PV= 0
PmT= -9000
FV= 39825.72
P/Y=1
C/Y= 365
B) Determine the total interest earned for all investments
C) Determine the combined overall rate of return for all of the investments
R of R = R = l/p
D) Determine the combined overall annual rate of return for all the investments
A r of r = R of R/N
Again thank you to whoever can help me!!
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
if you're using the TI-BA-II, it can be tricky to use.
i did some double checking to see what i would get based on what your problems were asking.
your first problem as i understand it:
monthly payment = 900
annual interest rate = 3%
interest rate is compounded weekly.
you want to know what the future value of those payments will be.
i get a future value of 45,840.72
this is significantly different than your future value of 145,955.43
i double checked to see if my figure was valid and i believe that it is.
just a quick check using 12 months to a year for 4 years at 3% per interest rate compounded 12 times a year gets me a future value of 45,838.08757.
this is a little less than what i got with 3% compounded weekly, but not much less.
if i take 3% and compound it monthly, my future value of 1 dollar for 12 months would be 1.030415957 which is the effective interest rate.
if i take 3% and compound it weekly, my future value of 1 dollar for 52 weeks would be 1.03044562.
3% compounded weekly is equal to 1.000028788 times as much as 3% compounded monthly.
it gets you more but not very much more, therefore my check of 3% compounded monthly on monthly payments of 900 for 4 years should be close, and it is.
your future value of 145,955.43 is much higher and so i believe it is in error.
for part B, my understanding is that you are investing 9000 at the end of each year for 4 years.
as a yearly investment of 9000 for 4 years at 4% compounded daily, i get a future value of 38,264.22226
that's closer to what you got but not quite there.
my assumptions are that your payments are at the end of each month or year.
to ensure that the calculator is processing end of period payments, i clicked on 2d pmt and the calculator showed END.
since that was correct, i clicked on 2d cpt to quit.
if i wanted beginning of period payments, i would have clicked on 2d pmt and, if i saw END, i would click on 2d enter which would then change END to BGN.
since that's what i would want, i would then click 2d cpt to quit.
double check what you did and let me know if you get anything different than what i got.
the answers to the other parts of your question will be determined after we agree on your answers to the first part.
my email is dtheophilis@gmail.com
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