Question

In: Finance

Leslie Mosallam, who recently sold her Porsche, placed $8,600 in a savings account paying annual compound...

Leslie Mosallam, who recently sold her Porsche, placed $8,600 in a savings account paying annual compound interest of 5 percent.

Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2 6 and 16 years

Suppose Leslie moves her money into an account that pays 7 percent or one that pays 9 percent Rework part (a) using 7 and 9 percent.

What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you just did?

After placing $8,600 in a savings account paying annual compound interest of 5 percent, the amount of money that will accumulate if Leslie leaves the money in the bank for 2 years is

Expert Solution

1)

Future value after 2 years = Present value (1 + r)ⁿ

Future value after 2 years = 8600 (1 + 0.05)²

Future value after 2 years = 8600 * 1.1025

Future value after 2 years = 9,481.5

Future value after 6 years = Present value (1 + r)ⁿ

Future value after 6 years = 8600 (1 + 0.05)⁶

Future value after 6 years = 8600 * 1.3400956

Future value after 6 years = 11,524.82

Future value after 16 years = Present value (1 + r)ⁿ

Future value after 16 years = 8600 (1 + 0.05)¹⁶

Future value after 16 years = 8600 * 2.1828746

Future value after 16 years = 18,772.72

2)

7 percent:

Future value after 2 years = Present value (1 + r)ⁿ

Future value after 2 years = 8600 + 0.07)²

Future value after 2 years = 8600 * 1.1449

Future value after 2 years = 9,846.14

Future value after 6 years = Present value (1 + r)ⁿ

Future value after 6 years = 8600 (1 + 0.07)⁶

Future value after 6 years = 8600 * 1.5007304

Future value after 6 years = 12,906.28

Future value after 16 years = Present value (1 + r)ⁿ

Future value after 16 years = 8600 (1 + 0.07)¹⁶

Future value after 16 years = 8600 * 2.9521637

Future value after 16 years = 25,388.61

9 percent:

Future value after 2 years = Present value (1 + r)ⁿ

Future value after 2 years = 8600 (1 + 0.09)²

Future value after 2 years = 8600 * 1.1881

Future value after 2 years = 10,217.66

Future value after 6 years = Present value (1 + r)ⁿ

Future value after 6 years = 8600 (1 + 0.09)⁶

Future value after 6 years = 8600 * 1.6771

Future value after 6 years = 14,423.06

Future value after 16 years = Present value (1 + r)ⁿ

Future value after 16 years = 8600 (1 + 0.09)¹⁶

Future value after 16 years = 8600 * 3.9703059

Future value after 16 years = 34,144.63

There is a direct relationship between future value and time & interest rate. As time and interest rate increases, future value also increases.

jeff jeffy answered 1 year ago

Leslie Mosallam, who recently sold her Porsche, placed $9,600 in a savings account paying annual compound...

Leslie Mosallam, who recently sold her Porsche, placed $9,600 in a savings account paying annual compound interest of 5 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2, 6, and 16 year(s). b. Suppose Leslie moves her money into an account that pays 7 percent or one that pays 9 percent. Rework part (a) using 7 percent and 9 percent. c. What conclusions can you draw about the relationship...

Leslie Mosallam, who recently sold her Porsche, placed $10,400 in a savings account paying annual compound...

Leslie Mosallam, who recently sold her Porsche, placed $10,400 in a savings account paying annual compound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2, 6, and 16 year(s). b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part (a) using 8 percent and 10 percent. c. What conclusions can you draw about the relationship...

2. Leslie Mosallam, who recently sold her Porsche, placed $10,800 in a savings account paying annual...

2. Leslie Mosallam, who recently sold her Porsche, placed $10,800 in a savings account paying annual compound interest of 6 percent. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2, 6, and 16 year(s). B. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part (a) using 8 percent and 10 percent. What conclusions can you draw about the relationship between...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8400 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8400 in a savings account paying annual compound interest of 5 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2, 6, and 16 year(s). b. Suppose Leslie moves her money into an account that pays 7 percent or one that pays 9 percent. Rework part (a) using 7 percent and 9 percent. c. What conclusions can you draw about...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8400 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8400 in a savings account paying annual compound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 3, 7, and 17 year(s). b. Suppose Leslie moves her money into an account that pays 10 percent or one that pays percent. Rework part (a) using 8 percent and 10 percent. c. What conclusions can you draw about the...

Leslie? Mosallam, who recently sold her? Porsche, placed ?$9 comma 800 in a savings account paying...

Leslie? Mosallam, who recently sold her? Porsche, placed ?$9 comma 800 in a savings account paying annual compound interest of 6 percent. a.??Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 3?, 7?, and 17 ?year(s). b.??Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part ?(a?) using 8 percent and 10 percent. c.??What conclusions can you draw about the relationship between...

Leslie Mosallam, who recently sold her Porsche, placed $10 comma 20010,200 in a savings account paying...

Leslie Mosallam, who recently sold her Porsche, placed $10 comma 20010,200 in a savings account paying annual compound interest of 77 percent.a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 22, 66, and 1616 year(s).b. Suppose Leslie moves her money into an account that pays 99 percent or one that pays 1111 percent. Rework part (a) using 99 percent and 1111 percent. c. What conclusions can you draw about the relationship...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $10200 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $10200 in a savings account paying annual compound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 3, 7, and 17 year(s). b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part (a) using 8 percent and 10 percent. c. What conclusions can you draw about...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8000 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8000 in a savings account paying annual compound interest of 5 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 3, 7, and 17 year(s). b.Suppose Leslie moves her money into an account that pays 7 percent or one that pays 9percent. Rework part (a) using 7percent and 9 percent. c.What conclusions can you draw about the relationship between interest...

Leslie Mosallam, who recently sold her Porsche, placed $9 comma 200 in a savings account paying...

Leslie Mosallam, who recently sold her Porsche, placed $9 comma 200 in a savings account paying annual compound interest of 7 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 2, 6, and 16 year(s). b. Suppose Leslie moves her money into an account that pays 9 percent or one that pays 11 percent. Rework part (a) using 9 percent and 11 percent. c. What conclusions can you draw about...

Question

Leslie Mosallam, who recently sold her Porsche, placed $8,600 in a savings account paying annual compound...

Solutions

Expert Solution

Related Solutions

Leslie Mosallam, who recently sold her Porsche, placed $9,600 in a savings account paying annual compound...

Leslie Mosallam, who recently sold her Porsche, placed $10,400 in a savings account paying annual compound...

2. Leslie Mosallam, who recently sold her Porsche, placed $10,800 in a savings account paying annual...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8400 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8400 in a savings account paying...

Leslie? Mosallam, who recently sold her? Porsche, placed ?$9 comma 800 in a savings account paying...

Leslie Mosallam, who recently sold her Porsche, placed $10 comma 20010,200 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $10200 in a savings account paying...

(Future value) Leslie Mosallam, who recently sold her Porsche, placed $8000 in a savings account paying...

Leslie Mosallam, who recently sold her Porsche, placed $9 comma 200 in a savings account paying...

Question

Leslie​ Mosallam, who recently sold her​ Porsche, placed $8,600 in a savings account paying annual compound...

Solutions

Expert Solution

Related Solutions

Leslie Mosallam, who recently sold her Porsche, placed $8,600 in a savings account paying annual compound...