Question: Derek can deposit $206.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month.

Derek can deposit $206.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 14.00% and compounds interest monthly. Derek can deposit $2,431.00 per year for the next 10 years into an account at Bank B. The first deposit will be made next year. Bank B compounds interest annually. What rate must Bank B pay for Derek to have the same amount in both accounts after 10 years?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Assume the real rate of interest is 2.00% and the inflation rate is 4.00%. What is the value today of receiving 10,637.00 in 8.00 years? 2 decimal places Derek can deposit $237.00 per month for the...

Please help with these two problems! 1. Derek currently has $11,509.00 in an account that pays 5.00%. He will withdraw $5,918.00 every other year beginning next year until he has taken 7.00...

2. Derek can deposit $293.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 14.00% and compounds interest monthly. Derek can deposit...

Derek currently has $12,331.00 in an account that pays 4.00%. He will withdraw $5,691.00 every other year beginning next year until he has taken 4.00 withdrawals. He will deposit $12331.0 every other...

Derek currently has $14,544.00 in an account that pays 4.00%. He will withdraw $5.927.00 every other year beginning next year until he has taken 4.00 withdrawals. He will deposit $14544.0 every other...

Derek can deposit $261.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 15.00% and compounds interest monthly. Derek can deposit...

Derek can deposit $ 2 9 8 . 0 0 per month for the next 1 0 years into an account at Bank A . The first deposit will be made next month. Bank A pays 1 3 . 0 0 % and compounds interest monthly. Derek...

Derek can deposit $243.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 15.00% and compounds interest monthly. Derek can deposit...

Derek can deposit $225.00 per month for the next 10 years into an account at Bank A The first deposit will be made next and compounds interest monthly Derek can deposit $2.401.00 per year for the...

B Derek currently has $12,382.00 in an account that pays 5.00%. He will withdraw $5,008.00 every other year beginning next year until he has taken 5.00 withdrawals. He will deposit $12382.0 every...

In Year 8, a married individual taxpayer incurred net long-term capital losses that amounted to $10,000. The taxpayer had previously reported the following net long-term capital gains: Year Net...

Activity: Internet Exercise 3.1 Find the mission statement of a hospitality or travel company on the Internet. Critique the mission statement against the guidelines for a mission statement, as stated...

list and discuss data collection measurement tools in project management

Friction Loss in Pumping Oil to Pressurized Tank. An oil having a density of 833 kg/m' and a viscosity of 3.3 x 10-3 Pa s is pumped from an open tank to a pressurized tank held at 345 kPa gage. The...

Construct a small population and stratication for which V( tstr) using proportional allocation is larger than the variance that would be obtained by taking an SRS with the same number of observations.

Solve the following: Use Perry's CHE Handbook for all physical and chemical properties. 2.10-8. Entry Lengih for Flow in a Pipe. Air at 10C and 1.0 atm abs pressure is flowing at a velocity of 2.0...

Given and extremely large list of words, which data structure would you use to count how many instance of each word appears, while minimizing the amount of space used. Pick one of the choices. Map...

With the evidence given in each case listed below, tell whether stress-corrosion cracking, corrosion- fatigue cracking, hydrogen-induced cracking or a combination of them may be the cause of failure...

Evans Incorporated had current liabilities apt april 3 0 of 6 2 , 7 0 0 . the firms current ratio at the date was 1 . 8 . calculate the firm current assets and working capital at april 3 0

Event B: rolling an odd number and the spinner landing on green

Find the probability of selecting a number greater than 1000.

Find the probability of selecting a number that is not divisible by 1000.