What is the dollar amount of interest that is earned

Assignment Help Finance Basics

Reference no: EM131966192

Question: You deposit $500 in a bank in a 1-year time deposit. With a time deposit you cannot withdraw funds from the account until the end of the term. Interest in the account is compounded semiannually (m = 2) at the annual nominal rate of 8%. In the final compounding interval, what is the dollar amount of interest that is earned from earlier interest (rather than off of the original principal)? In the final compounding interval, what is the dollar amount of interest that is earned from earlier interest?

Reference no: EM131966192

Questions Cloud

What position should you take in the asset : What position should you take in the underlying asset, derivative A, and derivative B to be delta- gamma-, and vega-neutral today?

Discuss the plot structure of citizen kane : Discuss the plot structure of Citizen Kane. Various critics have compared its structure to a labyrinth, a prism and a mystery story.

Percent increase in quantity demanded : if the price elasticity of demand for a good is 1.5 then a 3 percent decrease in price results in a 4.5 percent increase in quantity demanded.

Australia to begin increasing official interest rates : Discuss the connection between the OECD "urging Australia to begin increasing official interest rates' and this how can

What is the dollar amount of interest that is earned : You deposit $500 in a bank in a 1-year time deposit. With a time deposit you cannot withdraw funds from the account until the end of the term.

Lower the average total cost of production : Monopolistically competitive firms could increase the quantity they produce and potentially lower the average total cost of production. Why don't they do so?

Derive the probability distribution : Derive the probability distribution of the 1-year HPR on a 30-year U.S. Treasury bond with an 4.0% coupon if it is currently selling at par and the probability.

Prepare speech about issue of why need more gun control laws : Prepare a persuasive speech about the issue of why we need more gun control laws? and we need to have the legal age for buying a gun as 21.

Develop operative risk control procedures : Organisational Change and Development BBMM603 - Conduct background research in regards to the legislation and compliance requirements

User Account

All Pages