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Your bank offers a savings account that pays a stated (nominal) interest rate of 10 percent...

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Question

Finance

Your bank offers a savings account that pays a stated (nominal)interest rate of 10 percent per year, compoundedsemiannually.

  

Requirement 1:

If you deposit $15,000 today into this account and leave itinvested for 5 years, how much will you have in the account at theend of Year 5? (Enter rounded answer asdirected, but do not use rounded numbers in intermediatecalculations. Round your answer to 2 decimalplaces (e.g., 32.16).)

  

Account Balance$   
Requirement 2:
What is the effective annual interest rate earned on moneyinvested in this account? (Round your answer to 2 decimalplaces (e.g., 32.16).)

  

Effective Annual Rate%
Requirement 3:
What is the highest effective annual rate attainable with a 10percent nominal rate?

Answer & Explanation Solved by verified expert
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We are given the following informationPV15000r1000n5frequency2Semi Annual CompoundingRequirement 1 We need to    See Answer
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Transcribed Image Text

Your bank offers a savings account that pays a stated (nominal)interest rate of 10 percent per year, compoundedsemiannually.  Requirement 1:If you deposit $15,000 today into this account and leave itinvested for 5 years, how much will you have in the account at theend of Year 5? (Enter rounded answer asdirected, but do not use rounded numbers in intermediatecalculations. Round your answer to 2 decimalplaces (e.g., 32.16).)  Account Balance$   Requirement 2:What is the effective annual interest rate earned on moneyinvested in this account? (Round your answer to 2 decimalplaces (e.g., 32.16).)  Effective Annual Rate%Requirement 3:What is the highest effective annual rate attainable with a 10percent nominal rate?

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