Suppose that $10,000 is deposited into a saving account that earns 6% interest, compounded annually. a) Assuming that no additional deposits or withdrawals are made, use the appropriate compound interest factors to determine how much the account will be worth: i) After 5 years; ii) After 20 years. b) Verify that your answers in part (a) are correct by constructing a table or spreadsheet that shows how the initial deposit will grow each year over 20 years. At a minimum, your table or spreadsheet should include a row for each year and show: the amount of money in the savings account at the start of each year. the amount of interest earned each year; and the amount of money in the savings account at the end of each year, after interest is paid. Be sure to briefly explain how your table or spreadsheet verifies your results from part (a). c) Again assuming that no additional deposits or withdrawals are made, how many years will it take until there is at least $50,000 in the account?
Suppose that $10,000 is deposited into a saving account that earns 6% interest, compounded annually.
a) Assuming that no additional deposits or withdrawals are made, use the appropriate compound interest
factors to determine how much the account will be worth:
i) After 5 years;
ii) After 20 years.
b) Verify that your answers in part (a) are correct by constructing a table or spreadsheet that shows how
the initial deposit will grow each year over 20 years. At a minimum, your table or spreadsheet should
include a row for each year and show:
the amount of money in the savings account at the start of each year.
the amount of interest earned each year; and
the amount of money in the savings account at the end of each year, after interest is paid.
Be sure to briefly explain how your table or spreadsheet verifies your results from part (a).
c) Again assuming that no additional deposits or withdrawals are made, how many years will it take until
there is at least $50,000 in the account?
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