Amount invested today 238,000 Annual rate of return 8.3% Years until maturity 21 You are thinking about retirement, and would like to compute how much you will have some time in the future. Using the data from above, please compute future amounts, and then answer these questions: #1 How much MORE will you have if compounding is monthly rather than annually? #2 How much MORE will you have if compounding is daily rather than monthly? A Between 4,000 and 10,000 B Between 10,000 and 12,000 C Between 12,000 and 14,000 D Between 14,000 and 20,000

Amount invested today 238,000 Annual rate of return 8.3% Years until maturity 21 You are thinking about retirement, and would like to compute how much you will have some time in the future. Using the data from above, please compute future amounts, and then answer these questions: #1 How much MORE will you have if compounding is monthly rather than annually? #2 How much MORE will you have if compounding is daily rather than monthly? A Between 4,000 and 10,000 B Between 10,000 and 12,000 C Between 12,000 and 14,000 D Between 14,000 and 20,000

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 9PROB

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	Compoundin g




Amount invested today		238,000
Annual rate of return		8.3%
Years until maturity		21

You are thinking about retirement, and would like
to compute how much you will have some time in
the future.

Using the data from above, please compute future
amounts, and then answer these questions:

#1 How much MORE will you have if compounding is
monthly rather than annually?






#2 How much MORE will you have if compounding is
daily rather than monthly?
A Between 4,000 and 10,000
B Between 10,000 and 12,000
C Between 12,000 and 14,000
D Between 14,000 and 20,000