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# Suppose you deposit 1000 in 3 payments of 333.333 each on January 1 of 2007 2008 and 2009 How much would you have in your account on January 1 2009 based on 8 percent annual compounding?

###### Wiki User

###### July 14, 2009 6:33AM

{[(333.333 * 1.08) + 333.333)] * 1.08} + 333.333 =

**$1,082.13** ($1082.13225)

## Related Questions

###### Asked in Math and Arithmetic, Mathematical Finance, Algebra

### A bank is paying 7.5 percent APR on a CD Note The convention when there are no periodic payments is to assume annual compounding unless stated otherwise?

A bank is paying 7.5% APR on a CD. (Note: The convention when
there are no periodic payments is to assume annual compounding,
unless stated otherwise. Thus this is annual compounding.) If you
put $2500 into an account, how much will the account be worth in 3
years?
a. 3062.5
b. 3105.74
c. 2505.63
d. 4375
e. insufficient information to compute
The answer is b) 3105.74. After the first year, it is
worth $2687.50. After the second year it is worth $2889.06, and
after the third year it is worth $3105.74.
Just multiply 0.075 by the amount in the account at the
beginning of the year to get the interest for that year, then add
that amount to get the new value for the end of that year.
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###### Asked in Math and Arithmetic, Mathematical Finance, Algebra

### What is the interest on 1200 invested for 2 years in an account that earns 5 percent interest per year?

The answer, assuming compounding once per year and using generic
monetary units (MUs), is MU123.
In the first year, MU1,200 earning 5% generates MU60 of
interest.
The MU60 earned the first year is added to the original MU1,200,
allowing us to earn interest on MU1,260 in the second year.
MU1,260 earning 5% generates MU63.
So, MU60 + MU63 is equal to MU123.
The answers will be different assuming different compounding
periods as follows:
Compounding Period Two Years of Interest
No compounding MU120.00
Yearly compounding MU123.00
Six-month compounding MU124.58
Quarterly compounding MU125.38
Monthly compounding MU125.93
Daily compounding MU126.20
Continuous compounding MU126.21

###### Asked in Business Accounting and Bookkeeping, The Difference Between

### Difference between income and expenditure account and p and l account?

Differences Between Receipts And Payments Account And Income And
Expenditure Account
The following are the main differences between receipts and
payments account and income and expenditure account:
1. Nature
Receipts and payments account is a summary of cash transactions
for a period and it is a real account. Income and expenditure
account is a summary of expenditure and income like trading and
profit and loss account and it is a nominal account.
2. Objective
Receipts and payments account is prepared to show cash and bank
receipts and payments during the period to derive closing balance
of cash and bank. Income and expenditure account is prepared to
show the net result of the operation during the period to derive
surplus or deficit.
3. Recording
All cash and cheque receipts are recorded on debit side of
receipts and payments account where as all cash and bank payments
are recorded on credit side. In income and expenditure account all
expenditure of revenue nature are recorded on debit side and all
incomes of revenue nature are recorded on credit side.
4. Capital And Revenue Items
There is no distinction between capital and revenue receipts and
payments in receipts and payments account. All expenses and incomes
of revenue nature are recorded on accrual basis in income and
expenditure account.
5. Contents
Receipts and payments account contains only cash and bank
transactions. Income and expenditure account contains both cash and
non-cash expenses and incomes of revenue nature.
6. Balance Sheet Requirement
Receipts and payments account is not required to prepare balance
sheet. Income and expenditure account is required to prepare
balance sheet.
7. Adjustments
No adjustments are required in receipts and payments account. In
income and expenditure account adjustments are made because it is
prepared on accrual basis.

###### Asked in Interest Rates

### What is the difference between effective interest rates and nominal interest rates?

Nominal interest rate is also defined as a stated interest rate.
This interest works according to the simple interest and does not
take into account the compounding periods.
Effective interest rate is the one which caters the compounding
periods during a payment plan. It is used to compare the annual
interest between loans with different compounding periods like
week, month, year etc. In general stated or nominal interest rate
is less than the effective one. And the later depicts the true
picture of financial payments.