Your older sister deposited $15,000 today at 17.5 percent interest for 20 years. You would like to have just as much money at the end of the next 20 years as your sister will have. However, you can only earn 10 percent interest. How much more money must you deposit today than your sister did if you are to have the same amount at the end of the 20 years? You are opening an investment account that will earn 6.5% compounded annually. You will invest $1,000 one year from today, $800 two years from today, and 1,200 three years from today. What will the value of your account be 4 years from today? You are investing $2,000 into an account that earns a compound annual rate of 2.5%. How long will it be before your account balance grows to $6,000? Your current account balance is $7,500. You invested $6,300 5 years ago. What rate of return did you earn on this investment?
Your older sister deposited $15,000 today at 17.5 percent interest for 20 years. You would like to have just as much money at the end of the next 20 years as your sister will have. However, you can only earn 10 percent interest. How much more money must you deposit today than your sister did if you are to have the same amount at the end of the 20 years? You are opening an investment account that will earn 6.5% compounded annually. You will invest $1,000 one year from today, $800 two years from today, and 1,200 three years from today. What will the value of your account be 4 years from today? You are investing $2,000 into an account that earns a compound annual rate of 2.5%. How long will it be before your account balance grows to $6,000? Your current account balance is $7,500. You invested $6,300 5 years ago. What rate of return did you earn on this investment?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Interest
A)
Your older sister deposited $15,000 today at 17.5 percent interest for 20 years. You would like to have just as much money at the end of the next 20 years as your sister will have. However, you can only earn 10 percent interest. How much more money must you deposit today than your sister did if you are to have the same amount at the end of the 20 years?
You are opening an investment account that will earn 6.5% compounded annually. You will invest $1,000 one year from today, $800 two years from today, and 1,200 three years from today. What will the value of your account be 4 years from today?
You are investing $2,000 into an account that earns a compound annual rate of 2.5%. How long will it be before your account balance grows to $6,000?
Your current account balance is $7,500. You invested $6,300 5 years ago. What rate of return did you earn on this investment?
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