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1. Solve each problem involving a single payment investment that earns compound interest. a) $8 000 was invested for 6 years at 5%, compounded annually. What was the investment worth at its maturity? b) An investment earned 3% interest, compounded monthly, for 7 years. At its maturity, the investment was worth $10 000. What amount was invested? c) $3500 was invested for 5 years at an interest rate that was compounded monthly. At its maturity, the investment was worth $4600. What was the annual interest rate?

1. Solve each problem involving a single payment investment that earns compound interest. a) $8 000 was invested for 6 years at 5%, compounded annually. What was the investment worth at its maturity? b) An investment earned 3% interest, compounded monthly, for 7 years. At its maturity, the investment was worth $10 000. What amount was invested? c) $3500 was invested for 5 years at an interest rate that was compounded monthly. At its maturity, the investment was worth $4600. What was the annual interest rate?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Solve each problem involving a single payment investment that earns compound interest. SHETHE a) $8 000 was invested for 6 years at 5%, compounded annually. What was the investment worth at its maturity? b) An investment earned 3% interest, compounded monthly, for 7 years. At its maturity, the investment was worth $10 000. What amount was invested? c) $3500 was invested for 5 years at an interest rate that was compounded monthly. At its maturity, the investment was worth $4600. What was the annual interest rate?
Transcribed Image Text:1. Solve each problem involving a single payment investment that earns compound interest. SHETHE a) $8 000 was invested for 6 years at 5%, compounded annually. What was the investment worth at its maturity? b) An investment earned 3% interest, compounded monthly, for 7 years. At its maturity, the investment was worth $10 000. What amount was invested? c) $3500 was invested for 5 years at an interest rate that was compounded monthly. At its maturity, the investment was worth $4600. What was the annual interest rate?
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