Answered: You invest $9,000 today at an annual…

You invest $9,000 today at an annual interest rate of 5%. How much do you expect to have 5 years from now if the interest compounds each year? $10,225.91 $11,133.33 $11,486.53 $11,979.14

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

You invest $9,000 today at an annual interest rate of 5%. How much do you expect to have 5 years from now if the interest compounds each year?

		$10,225.91
		$11,133.33
		$11,486.53
		$11,979.14

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