8. A $75,000 deposit earns 5.65 percent for eight years. If the account loses 2.25 percent...

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8. A $75,000 deposit earns 5.65 percent for eight years. If theaccount loses 2.25 percent per year after that for
two years, what is the value of the account at the end of thatsecond year (tenth year after the initial deposit)?
A. more than $107,800 but less than $108,700
B. more than $108,700 but less than $109,650
C. more than $109,650 but less than $110,400
D. more than $110,400 but less than $111,150
E. more than $111,150 but less than $112,000
18. Assume you borrow $800 from a payday lender. The terms arethat you must pay a fee of $25 in advance
(today) and one year from now you need to repay $975. What impliedinterest rate are you paying?

19. Arnold invested $28,750 in the stock market three years agowith hopes that it would grow to $48,000 in eight
years. Today the investment is valued at $30,286. From this pointforward, what annual return would Arnold
need to reach his initial goal of $48,000?

20. A $64,000 deposit earns a nominal rate of 6.48 percent,compounded monthly, for 10 years. If the account
loses 0.40 percent per month after that, how many months will ittake to be reduced back to $87,500? (Round
the number of months to the nearest tenth)

Answer & Explanation Solved by verified expert

3.6 Ratings (491 Votes)

8 This question has two partsFirst we need to grow the deposit at 556 for 8 yearsAnd the the growth rate will become negative 225 for 2yearsBoth of these parts can be incorporated in the followingequationAs FV is more than See Answer

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8. A $75,000 deposit earns 5.65 percent for eight years. If theaccount loses 2.25 percent per year after that fortwo years, what is the value of the account at the end of thatsecond year (tenth year after the initial deposit)?A. more than $107,800 but less than $108,700B. more than $108,700 but less than $109,650C. more than $109,650 but less than $110,400D. more than $110,400 but less than $111,150E. more than $111,150 but less than $112,00018. Assume you borrow $800 from a payday lender. The terms arethat you must pay a fee of $25 in advance(today) and one year from now you need to repay $975. What impliedinterest rate are you paying?19. Arnold invested $28,750 in the stock market three years agowith hopes that it would grow to $48,000 in eightyears. Today the investment is valued at $30,286. From this pointforward, what annual return would Arnoldneed to reach his initial goal of $48,000?20. A $64,000 deposit earns a nominal rate of 6.48 percent,compounded monthly, for 10 years. If the accountloses 0.40 percent per month after that, how many months will ittake to be reduced back to $87,500? (Roundthe number of months to the nearest tenth)