Question

You just received a bonus of ​$ 3, 000. a.  Calculate the future value of ​$ 3, 000​, given that it will be held in the bank for 10 years and earn an annual interest rate of 6 percent. b.  Recalculate part ​(a​) using a compounding period that is​ (1) semiannual and​ (2) bimonthly. c.  Recalculate parts ​(a​) and ​(b​) using an annual interest rate of 12 percent. d.  Recalculate part ​(a​) using a time horizon of 20 years at an annual interest rate of 6 percent. e.  What conclusions can you draw when you compare the answers in parts ​(c​) and ​(d​) with the answers in parts ​(a​) and ​(b​)? a.  What is the future value of ​$ 3, 000 in a bank account for 10 years at an annual interest rate of 6 ​percent?

Answer 1