Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 34P
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Question
![[Tugas
]
1. If you deposit $10,000 in a bank account that pays 10%
interest annually, how much will be in your account after 5
years?
2. What is the present value of a security that will pay $5,000 in
20 years if securities of equal risk pay 7% annually?
3. Your parents will retire in 18 years. They currently have
$250,000, and they think they will need $1 million at retirement.
What annual interest rate must they earn to reach their goal,
assuming they don't save any additional funds?
4. If you deposit money today in an account that pays 6.5%
annual interest, how long will it take to double your money?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ffc7931-75b4-4367-ba08-c2df19cca0f2%2F494245ea-15b2-43d3-a44a-28345c07bd0a%2F7k58ju8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[Tugas
]
1. If you deposit $10,000 in a bank account that pays 10%
interest annually, how much will be in your account after 5
years?
2. What is the present value of a security that will pay $5,000 in
20 years if securities of equal risk pay 7% annually?
3. Your parents will retire in 18 years. They currently have
$250,000, and they think they will need $1 million at retirement.
What annual interest rate must they earn to reach their goal,
assuming they don't save any additional funds?
4. If you deposit money today in an account that pays 6.5%
annual interest, how long will it take to double your money?
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