Question

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What will 6000 USD invested for 10 years at 6 percent compounded annually grow to? How...

What will 6000 USD invested for 10 years at 6 percent compounded annually grow to?

How many years will it take 400 USD to grow to 1 671 USD if it is invested at 10 percent compounded annually?

At what rate would 1000 USD have to be invested to grow to 4046 USD in 10 years?

Calculate the future sum of 1000 USD, given that it will be held in the bank for 5 years and earn 10 percent compounded semiannually.

What is an annuity due? How does it differ from an ordinary annuity?

What is the present value of an ordinary annuity of 1000 USD per year for 7 years discounted back to the present at 10 percent? What would be the present value if it were an annuity due?

explain in detail and solve the following cases.

Solutions

Expert Solution

The value of investment at end of 10 years = $ 10745.1

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(1 + 0.10) ⁿ = 4.1775

n ln 1.10 = ln 4.1775

n = 15 years

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(1 + interest rate)¹⁰ = 4.046

( 1 + interest rate ) =

Interest rate = 15%

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Future value = $ 1628.9

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In annuity due, the payments are made at the beginning of the year whereas in ordinary annuity the payments are made at the end of the year.

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Present value of ordinary annuity = $ 4868.42

Present value of annuity due = $ 5355.26

jeff jeffy answered 1 year ago

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