Suppose you invest $1000 in an account paying 10% interest per year.

Suppose you invest $1000 in an account paying 10% interest per year. How much will you have in the account in 7 years? in 20 years? in 75 years?

Solutions

Expert Solution

In 7 years, in 20 years, in 75 years the future values are solved

By putting all the values from the question given data. you can also do that in excel just by using the formula in a cell =FV press tab then simply follow up the formula by putting all the data in sequence vise.

FV in 7 years= $1,000 x(1.10) ^7= $1948.72

FV in 20 years= $1000 x(1.10) ^20= $6727.5

FV in 75 years= $1000 x(1.10) ^75= $1271895.37

umair jan answered 3 years ago

Next > < Previous

Related Solutions

Suppose you invest $1000 in an account paying 8% interest per year.

Suppose you invest $1000 in an account paying 8% interest per year. a. What is the balance in the account after 3 years? How much of this balance corresponds to “interest on interest”

Suppose you deposit $1000 into a bank account earning 2% interest for the next year. If...

Suppose you deposit $1000 into a bank account earning 2% interest for the next year. If the inflation rate over the next year is 1%, then what can be said about the 2% return you have earned on your deposit? a) The $1020 you will have in one year will purchase less than $1000 would purchase today. b) The $1020 you will have in one year will purchase more than $1000 would purchase today. c) The $1020 you will have...

If you invest $1,000 today at an interest rate of 10% per year, how much will...

If you invest $1,000 today at an interest rate of 10% per year, how much will you have 20 years from now, assuming no withdrawals in the interim? What is the present value of the following cash flows at an interest rate of 10% per year? $100 received five years from now. $100 received 60 years from now. $100 received each year beginning one year from now and ending 10 years from now. $100 received each year for 10 years...

Suppose that you invest in a 10-year 8% Treasury Note sold at par and the interest...

Suppose that you invest in a 10-year 8% Treasury Note sold at par and the interest rate drops to 6% after your purchase. What will be the Total Dollar Return and the Realized Yield if you hold the bond (a) for 3 years; (b) for 7 years; (c) to maturity. In each case, decompose the Total Dollar Return into (1) Total Coupon Interest; (2) Interest on Interest; (3) Capital Gain / Loss.

Suppose you invest $10,000 into a fund paying 3.6% annual interest. How much will you have...

Suppose you invest $10,000 into a fund paying 3.6% annual interest. How much will you have after 5 years is the interest is compounded: a) Annually b) Semi-Annually c) Quarterly d) Monthly

You invested money in a savings account paying 10% interest seven years ago.

You invested money in a savings account paying 10% interest seven years ago. The account is now worth $5,527.50. How much did you invest?

Suppose you are invested in an (excellent) account that pays 50% interest per year, paid monthly....

Suppose you are invested in an (excellent) account that pays 50% interest per year, paid monthly. The account is closed to new investment, so you cannot reinvest the interest. Do you prefer this account to one that pays a single payment of 50% at the end of the year, rather than monthly? Why or why not? Explain your reasoning (you may wish to reference ideas like compounding, NPV, IRR, etc.)

Suppose that a firm has borrowed $1000 in the current year at a 10% interest rate,...

Suppose that a firm has borrowed $1000 in the current year at a 10% interest rate, with a commitment to repay the loan (principal and interest) in equal annual installments over the following five years. Calculate: the amount of the annual repayment; the stream of interest payments which can be entered in the tax calculation of the private benefit-cost analysis. Answer: (i) $263.80 (ii) year 1 = $100; year 2 = $83.62; year 3 = $65.60; year 4 = $45.78;...

A bank invested $50 million in a one-year asset paying 10 percent interest per year and...

A bank invested $50 million in a one-year asset paying 10 percent interest per year and simultaneously issued a $50 million, two-year liability paying 8 percent interest per year to pay for it. • Is the bank short funded or long funded? • What is the bank’s net interest income in year one • What will be the bank’s net interest income in year two if at the end of the first year all interest rates have decreased by 1.5...

You deposit $1,300 at the end of each year into an account paying 8.6 percent interest....

You deposit $1,300 at the end of each year into an account paying 8.6 percent interest. a. How much money will you have in the account in 24 years? b. How much will you have if you make deposits for 48 years?

Subjects