Purchase Solution

Interest and Initial Value

Not what you're looking for?

Ask Custom Question

Brian invested $2000 in certificates of deposit. Some was placed in a 4% simple interest certificate of deposit and the rest in a 5% simple interest certificate of deposit. If at the end of the year, $86 was the total of the interest earned, how much did he invest in the 4% certificate?

Purchase this Solution
Solution Summary

Initial value of an investment is calculated in this solution.

Solution Preview

Assume that he invested x dollars in the 4% certificate. Then 2000-x was ...

Solution provided by:
Changping Wang, MA
Education
  • BSc , Wuhan Univ. China
  • MA, Shandong Univ.
Recent Feedback
  • "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
  • "excellent work"
  • "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
  • "Thank you"
  • "Thank you very much for your valuable time and assistance!"
Purchase this Solution
Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Motivation

This tests some key elements of major motivation theories.

View More Free Quizzes
Related BrainMass Solutions

  • Bond values

    /100)2 *(initial value) Year3 = (1 + interest/100)*Year2 = = (1 + interest/100)3 *(initial value) In general: YearN = (1 + interest/100)N *(initial value) initial value = YearN / (1 + interest/100)N = $1000 / (1 + interest/100)N For this

  • future value interest factors

    $400 We need to find the nearest year that has future value interest factors that is near 2 and 4.

  • Future Values Tables

    $400 We need to find the nearest year that has future value interest factors that is near 2 and 4.

  • Interest Rate Futures

    There is an initial margin requirement of $2,565 and a margin maintenance requirement of $1,900.  

  • Zero coupon bond

    203215 Zero coupon bond: what is initial price using PV, when market interest rate change? A 15 year, $1,000 par value zero-coupon rate bond is to be issued to yield 10%. a. What should be the initial price of the bond?

  • NPV of Projects, Expansion Option

    117925 NPV of Projects, Expansion Option Your company is considering the following project and has a cost of capital of 15%. A. What is the Net Present Value of the initial project? B. What is the Net Present Value of the expansion option? C.

  • Present Value

    We can use the compound interest formula Final Value = Initial Value X (1+rate)^n Here Final Value = 5,539.92 rate = 4.25% n = time period = 17 years 5,539.92 = Initial Value X (1+4.25%)^17 5,539.92 = Initial Value X 2.029 Initial Value = 5,539.92

  • Future Value

    The total amount is now $133.10 The general formula for calculating the future value of an initial amount is Future Value = Amount X (1+r)^n where r is the rate and n is the time period Here FV = 100X(1+10%)^3 = $133.10 The solution explains the

  • Ordinary annuity calculations are correct for which transact

    A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 7%.d. A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 9%.

  • Question about Zero-Coupon Bond

    It helps find the initial price of bond and helps calculate the value of zero-compound rate bonds based on changing interest rates. Step by step calculations are provided for each problem.

View More Related Solutions