Annual rate of interest in the savings account

Assignment Help Financial Management

Reference no: EM131297386

Aaron, Bradford and Charles have been friends since childhood. At the high school graduation ceremony they decided to make a bet about who would be the fastest to save $50,000. Exactly 10 years later they met at the first high school reunion. Which one(s) of the three friends, if any, was able to save $50,000 by that time? Calculate and explain in words all calculations. Additional information: Starting the high school graduation day, Aaron has been depositing $320 at the end of each month. Bradford went to college and so he started saving only once he started his first job, which was 5 years after the high school graduation. Since that time he was able to put $8,000 into his savings account at the beginning of each year. Charles, in turn, has been saving $1,500 at the end of each six months, starting the graduation day. The annual rate of interest in the savings account for all three friends is 6 percent, compounded monthly.

Reference no: EM131297386

Questions Cloud

Which one of the three homes would eric be able to afford : Eric decided that now that home prices are finally falling it’s time to buy his first home. A so-so house in Pomona costs about $500,000. A decent house in Fullerton costs about $700,000. If the annual mortgage rate on a 20-year loan is 6% (compounde..

Price-weighted index-what is the divisor on your index : You construct a price-weighted index of 48 stocks. At the beginning of the day the index is 9,180.67. During the day, 47 stock prices remain the same, and one stock price increases $4.00. At the end of the day, your index value is 9,196.65. What is t..

Coupon bond with annual coupon payments : Question BM has just issued a callable (at par) 5 year, 20% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $90 per $100 face value. What is the bond..

What is the new divisor : Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $88, $312, and $84, respectively. If Able undergoes a 1-for-4 reverse stock split. What is the new divisor?

Annual rate of interest in the savings account : Aaron, Bradford and Charles have been friends since childhood. At the high school graduation ceremony they decided to make a bet about who would be the fastest to save $50,000. Exactly 10 years later they met at the first high school reunion. Which o..

What is the current market price of the bond : The 4.5 percent bond of JL Motors has a face value of $1,000, a maturity of 7 years, semiannual interest payments, and a yield to maturity of 6.23 percent. What is the current market price of the bond?

What was the cash flow from operating activities : A firm had $60,000 in cash at year-end 2014 and $25,000 at year-end 2015. The firm invested in property plant and equipment totaling $300,000; cash flow from financing totaled $185,000. What was the cash flow from operating activities?

What is new divisor for the price-weighted index : Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $37, $312, and $94, respectively. If Baker undergoes a 2-for-1 stock split, what is the new divisor for the price-weighted index?

Maintains current relative proportions invested in stock : A fund manager manages a portfolio of mid-cap stocks. She anticipates receiving $30 million in cash four months from today to be invested in the portfolio in a manner that maintains the current relative proportions invested in each stock. what is the..

User Account

All Pages