Friday, December 27, 2013

Accounting assignment

Question 1 Delia Martin has $10,000 that she can bewilder in whatsoever of terzetto nest egg accounts for a 3- grade period. camber A compounds following on an categorybook bottom, slang B compounds disport twice each year and cant C compounds interest each quarter. All three marges s brace a utter annual interest say of 4 percent. a)What total would Ms Martin have at the oddity of the third year leaving all interest gainful on restore in each bank? Bank A (principal+ interest)10,000 x 1.04^ 3=$11248.64 Bank B(principal+ interest)10,000 x 1.02%^6=$11261.62 Bank C(principal+ interest)10,000 x 1.01^12=$11268.25 So, Bank A interests: 11,248.64-10,000=$1,248.64 Bank B interests: 11,261.62-10,000=$1,261.62 Bank C interests: 11,268.25-10,000=$1,268.25 b) What effective annual identify (EAR) would she earn in each of the banks? Bank AFor bank A compounds interest on an stated annual rear, thus, its annual interest rate is 4%. Bank B1+4%/22-1=4.04% Bank C1+4%/44-1= 4.06% c) On the basis of your findings in A and B, which bank should Ms Martin deal with? wherefore? I suggest Ms Martin to choose bank C. Because of bank C has higher annual interest ratetherefore, she can deposit in bank C to obtain higher interest. d) If a fourth part bank -Bank D, also with a 4percent stated interest rate - compounds interest continuously, how much would Ms Martin have at the mop up of the third year?
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Does this alternating(a) change your recommendation in c? Explain wherefore or why not? If deposit in bank D, Ms Martin could gains interest incontrovertible principal as at a lower place 10000 x 2.7183x0.04 =$11274.83 This result ! would be affecting the steer in question C. Because compound interest leave fall continuously based on the generated interest in a certain term plus principal, and thus, Ms Martin could receiving much interest if she deposits in bank D. Q2- You have been asked for your advice... If you want to liquidate a full essay, order it on our website: OrderCustomPaper.com

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