You have $1000 in an account earning 4% APR compounded daily. At the same time, you are to pay a lender $1,025 in exactly 242 days. Will your current deposit be able to satisfy that loan payment? Choose all the correct answers. A) No, the FV of $1000 will be less than $1025. B) Yes, the FV of $1000 will be greater than $1025 C) No, it will take longer than 242 days to grow to $1025 D) Yes, it will take less than 242 days to grow to $1025 E) Yes, because the PV of $1025 is less than $1000
You have $1000 in an account earning 4% APR compounded daily. At the same time, you are to pay a lender $1,025 in exactly 242 days. Will your current deposit be able to satisfy that loan payment? Choose all the correct answers. A) No, the FV of $1000 will be less than $1025. B) Yes, the FV of $1000 will be greater than $1025 C) No, it will take longer than 242 days to grow to $1025 D) Yes, it will take less than 242 days to grow to $1025 E) Yes, because the PV of $1025 is less than $1000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You have $1000 in an account earning 4% APR compounded daily. At the same time, you are to pay a lender $1,025 in exactly 242 days. Will your current deposit be able to satisfy that loan payment? Choose all the correct answers.
A) No, the FV of $1000 will be less than $1025.
B) Yes, the FV of $1000 will be greater than $1025
C) No, it will take longer than 242 days to grow to $1025
D) Yes, it will take less than 242 days to grow to $1025
E) Yes, because the PV of $1025 is less than $1000
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