First city bank pays 6 percent simple interest on its

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Reference no: EM13618514

a) First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually. If you made a deposit of $7,500 in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years?

b) Assume the total cost of a college education will be $280,000 when your child enters college in 18 years. You presently have $45,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college education?

c) In 2011, an 1880-O Morgan silver dollar sold for $13,113. What was the rate of return on this investment?

d) You want to buy a new sports coupe for $68,500, and the finance office at the dealership has quoted you a loan with an APR of 5.9 for 60 months to buy the car. What will your monthly payments be? What is the effective annual rate of this loan?

Reference no: EM13618514

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