{"id":125801,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/quantitative-techniques-narrative"},"modified":"2017-08-16T06:06:14","modified_gmt":"2017-08-16T06:06:14","slug":"quantitative-techniques-narrative","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/quantitative-techniques-narrative\/","title":{"rendered":"Quantitative Techniques Narrative"},"content":{"rendered":"<div class=\"the_content_wrapper\">\n<p>Quantitative Techniques Narrative<br \/> Abdol Akhim has just come from a Personal Finance class where he learned that he<br \/> can determine how much his savings will be worth in the future. Abdol is completing<br \/> his two-year business administration degree this semester and has been repairing<br \/> computers in his spare time to pay for his tuition and books. Abdol got out his savings<br \/> records and decided to apply what he had learned. He has a balance of $1,000 in a<br \/> money market account at First Savings Bank, and he considers this to be an emergency<br \/> fund. His instructor says that he should have 3\u20136 months of his total bills in an<br \/> emergency fund. His bills are currently $700 a month. He also has a checking account and a<br \/> regular savings account at First Savings Bank, and he will shift some of his funds from<br \/> those accounts into the emergency fund. One of Abdol\u2019s future goals is to buy a house.<br \/> He wants to start another account to save the $8,000 he needs for a down payment.<\/p>\n<p>1. How much interest will Abdol receive on $1,000 in a 365-day year if he keeps<br \/> it in the money market account earning 1.00% compounded daily?<\/p>\n<p>Initial Investment (PV) $1,000<br \/> Quoted Rate 1.00%<br \/> Compounding Frequency Daily Choose one<br \/> Number of compoundings (m) 365 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365<br \/> Quoted Rate divided by m = RATE 0.0027%<br \/> Number of Years 6<br \/> NPER (Num. of years * m) 2190<br \/> Ending Amount (FV) $8,000.00<br \/> Compound Interest $332.25<\/p>\n<p>2. How much money must Abdol shift from his other accounts to his emergency fund<br \/> to have four times his monthly bills in the account by the end of the year?<\/p>\n<p>Desired Emergency fund $2,800<br \/> Current balance in money mkt. $1,000<br \/> Interest that Abdol will earn $332.25<br \/> Balance to be transferred $1,800.00<\/p>\n<p>3. Abdol realizes he needs to earn more interest than his current money market can provide.<br \/> Using annual compounding on an account that pays 5.5% interest annually, find the amount<br \/> Abdol needs to invest to have the $8,000 down payment for his house in 5 years.<\/p>\n<p>Future Value Needed (FV) $8,000<br \/> Quoted Rate 5.5%<br \/> Compounding Frequency Annually Choose one<br \/> Number of compoundings (m) 5 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365<br \/> Quoted Rate divided by m = RATE 1.1000%<br \/> Number of Years 5<br \/> NPER (Num. of years * m) 25<br \/> Amount Invested Now (PV) $1,455.00<\/p>\n<p>4. Is 5.5% a realistic rate for Abdol to earn in a relatively short-term investment of 5 years, particularly at his bank?<br \/> Hint: For answering this question, explore how much interest do banks pay on short-term investments or CDs.<br \/> Compare this number with 5.5% to see whether it is a realistic goal. If not, propose to Abdol what should he invest in<br \/> instead.<\/p>\n<p>According to research on th current interest rates, the rates that are used in this question seem inline with the current rates that are offered. The highest rate for a money market account is 1.1% with no additional fees and the lowest is 0.26% with no additional fees.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Quantitative Techniques Narrative Abdol Akhim has just come from a Personal Finance class where he learned that he can determine how much his savings will be worth in the future. Abdol is completing his two-year business administration degree this semester <a href=\"https:\/\/www.benedictsol.com\/blogs\/quantitative-techniques-narrative\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-125801","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/125801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=125801"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/125801\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=125801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=125801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=125801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}