**a.** You need $17,000 in five years but you only have $12,000 now. At what interest rate must you invest the money assuming the interest is compounded annually?**b.** You have a $20,000 note payable which is due in three years. How much money must you put into a savings account today in order to have enough money to pay off the debt on time assuming your savings account earns 3% interest compounded annually?**c.** You put $2,750 into an account earning 4% interest compounded QUARTERLY. How much will be in this account at the end of 4 YEARS?**d.** In question "b." above, if you leave the money in the account for one more YEAR, how much more interest will you earn in that additional year (Year 5)?**e.** How long will it take to double $2,000 to $4,000 assuming you invest the $2,000 into an account earning 7% interest compounded annually?

As per guidelines, I am supposed to answer 1 question at a time. As the question is not specifically…

Answered: a. You need $17,000 in five years but…

a. You need $17,000 in five years but you only have $12,000 now. At what interest rate must you invest the money assuming the interest is compounded annually?

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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Question

**a.** You need $17,000 in five years but you only have $12,000 now. At what interest rate must you invest the money assuming the interest is compounded annually?

**b.** You have a $20,000 note payable which is due in three years. How much money must you put into a savings account today in order to have enough money to pay off the debt on time assuming your savings account earns 3% interest compounded annually?

**c.** You put $2,750 into an account earning 4% interest compounded QUARTERLY. How much will be in this account at the end of 4 YEARS?

**d.** In question "b." above, if you leave the money in the account for one more YEAR, how much more interest will you earn in that additional year (Year 5)?

**e.** How long will it take to double $2,000 to $4,000 assuming you invest the $2,000 into an account earning 7% interest compounded annually?

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