$5,100 invested for 9 years at 10 percent compounded annually will accumulate to
ID: 2702625 • Letter: #
Question
$5,100 invested for 9 years at 10 percent compounded annually will accumulate to $____ round to nearest cent.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
a. A calculate the future value of $5,000, given that it will be held in the bank for 7 years and earn an annual interest rate of 6 percent..
b. Recalculate part (a) using a compounding period that is (1) semiannual and (2) bimonthly.
c. . Recalculate parts (a) and (b) using an annual interest rate of 12 percent.
d. Recalculate part (a) using a time horizon of 14 years at an annual interest rate of 6 percent.
e. What conclusions can you draw when you compare the answers in parts c and (d) with the answers in parts (a) and b)?
Explanation / Answer
d. 6% annual compounding 14 years : 5000*(1+.06)^14= 11304.51 USD
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