Question

In: Finance

Calculate the future value of $9,000 in a. four years at an interest rate of 10%...

Calculate the future value of $9,000 in a. four years at an interest rate of 10% per year. b. eight years at an interest rate of 10% per year. c. four years at an interest rate 20% of per year. d. Why is the amount of interest earned in part ​(a​) less than half the amount of interest earned in part ​(b​)?

Solutions

Expert Solution

a.

Future Value = 9,000(1 + 0.10)4 = $13,176.90

b,

Future Value = 9,000(1 + 0.10)8 = $19,292.30

c.

Future Value = 9,000(1 + 0.20)4 = $18,662.40

d.

Due to time period of investment, interest earned is larger in part(b)


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