Question: 1. First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually.
If you made a $72,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years?
2. Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,211,500. Unfortunately for the previous owner, he had purchased it in 2000 at a price of $12,177,500.
What was his annual rate of return on this sculpture?
Solve for the unknown interest rate in each of the following (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Present Value Years Interest Rate Future Value 330 422 1,571 450 48,000 19 266,917 803,425 47.261 25