In: Finance
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)?
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)