future value

child’s education
June 28, 2019
accounting
June 28, 2019

You just received a bonus of 1,000.

a.  Calculate the future value of 1,000​, given that it will be held in the bank for 9 years and earn an annual interest rate of 8 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 116 percent.

d.  Recalculate part ​(a​) using a time horizon of 18 years at an annual interest rate of 8 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 ​$1,000 in a bank account for 9 years at an annual interest rate of 8 ​percent?

​$___​(Round to the nearest​ cent.)

 
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