Louisiana State University, Shreveport FIN FIN 701 Suppose on January 1 you deposit $12,500 in a savings account that pays a quoted interest rate of 1.8% (APR), with interest added (compounded) daily….
pays a quoted interest rate of 1.8% (APR), with interest added (compounded) daily. How much will you have in your account on November 1, or after 10 months? (assume N = 304 days) Recall that the interest rate (I/Y) represents the periodic rate based on how many times per YEAR the interest is compounded, hint, this is 365 times per year. Do no interim rounding on the interest rate. As for all TVM type problems, there should be no interim rounding of the interest rates.
b) Now suppose you leave your money in the bank for 22 months. Thus, on January 1 you deposit $12,500 in an account that pays a 1.80% compounded daily. How much will be in your account on November 1 the next year? (assume N = 669 days). Do no interim rounding on the interest rate. Do no interim rounding on the interest rate. Do no interim rounding on the interest rate.
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