Question 1 - You have an investment that will pay you 1.07 percent per month.
How much will you have per dollar invested in one year?
How much will you have per dollar invested in two years?
Question 2 - You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 11 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a 9 percent return.
Assume that the APR is compounded monthly. How much can you withdraw each month from your account assuming a 25-year withdrawal period?
Question 3 - You are looking at an investment that has an effective annual rate of 17 percent.
What is the effective semiannual return? What is the effective quarterly return?
What is the effective monthly return?