b.0o points Problem 11-123 [LO 11-S1] You want to invest $10,160 in a business o
ID: 2575831 • Letter: B
Question
b.0o points Problem 11-123 [LO 11-S1] You want to invest $10,160 in a business opportunity. If you keep the money invested in the business for three years, you will receive $11,150 back. If you keep the money invested in the business for six years, you will receive S1 3,120back. Currently, the money is in yoursavings account, which earns 10% nterest compounded annually. (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) (Use appropriate factor from the PV tables.) a. What is the fuure value of the money if it remains in your savings account for three years? (Round your answer to the nearest dollar amount.) uture Value b. What is the future value of the money if itremains in your savings account for six years? (Round your answer to the nearest dollar amount.) c. Is it better to invest in the business for three years, six years, or not at all? 3 years 6 years Not at allExplanation / Answer
Answer =1 CACLULATION OF THE FUTURE VALUE IF THE MONEY KEPT IN BANK Year Cash invested Inteted @ 10% - 10,160 - 10,160 1 1,016 11,176 2 1,118 12,294 3 1,229 13,523 4 1,352 14,875 5 1,488 16,363 6 1,636 17,999 Answer = a) Future Value if the money kept for 3 years = 13,523 Answer = b) Future Value if the money kept for 6 years = 17,999 Answer =c) return from the investment is less then return from the money keeping in the bank So Answer = Option3 = Not at all
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.