Prblm You invest $1,000 in a savings account with an annual interest rate of 5%, compoundedannually. What will the value of the investment be after 3 years?A) $1,150.00B) $1,157.63C) $1,200.00D) $1,215.00

Using the formula FV = P(1+r)n Substitute P=1,000, r=0.05, and n=3 into the formula. FV = $…

Answered: You invest $1,000 in a savings account…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

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Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 4QTD

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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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If you invest $1,000 at an annual interest rate of 5% compounded annually, how much will you have after 3 years? a) $1,150.00 b) $1,157.63 c) $1,162.89 d) $1,175.25
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You invest $1,000 in a savings account with an annual interest rate of 5%, compounded annually. What will the value of the investment be after 3 years? A) $1,150.00 B) $1,157.63 C) $1,200.00 D) $1,215.00