(Related to The Business of Life: Saving for Your First House) (Future value) You are hoping to buy a house the future and recently received an inheritance of $18,000. You intend to use your inheritance as a down payment your house. a. If you put your inheritance in an account that earns 8 percent interest compounded annually, how many years wi be before your inheritance grows to $34,000? b. If you let your money grow for 10.25 years at 8 percent, how much will you have? c. How long will it take your money to grow to $34,000 if you move it into an account that pays 4 percent compounded annually? How long will it take your money to grow to $34,000 if you move it into an account that pays 13 percent? d. What does all this tell you about the relationship among interest rates, time, and future sums? *** it be before your inheritance grows to $34,000? 8.26 years (Round to one decimal place.) b. If you let your money grow for 10.25 years at 8 percent, how much will you have? (Round to the nearest cent.)
(Related to The Business of Life: Saving for Your First House) (Future value) You are hoping to buy a house the future and recently received an inheritance of $18,000. You intend to use your inheritance as a down payment your house. a. If you put your inheritance in an account that earns 8 percent interest compounded annually, how many years wi be before your inheritance grows to $34,000? b. If you let your money grow for 10.25 years at 8 percent, how much will you have? c. How long will it take your money to grow to $34,000 if you move it into an account that pays 4 percent compounded annually? How long will it take your money to grow to $34,000 if you move it into an account that pays 13 percent? d. What does all this tell you about the relationship among interest rates, time, and future sums? *** it be before your inheritance grows to $34,000? 8.26 years (Round to one decimal place.) b. If you let your money grow for 10.25 years at 8 percent, how much will you have? (Round to the nearest cent.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:(Related to The Business of Life: Saving for Your First House) (Future value) You are hoping to buy a house
the future and recently received an inheritance of $18,000. You intend to use your inheritance as a down payment o
your house.
a. If you put your inheritance in an account that earns 8 percent interest compounded annually, how many years will
be before your inheritance grows to $34,000?
b. If you let your money grow for 10.25 years at 8 percent, how much will you have?
c. How long will it take your money to grow to $34,000 if you move it into an account that pays 4 percent
compounded annually? How long will it take your money to grow to $34,000 if you move it into an account that pays
13 percent?
d. What does all this tell you about the relationship among interest rates, time, and future sums?
it be before your inheritance grows to $34,000?
8.26 years (Round to one decimal place.)
b. If you let your money grow for 10.25 years at 8 percent, how much will you have?
(Round to the nearest cent.)
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