CFIN
5th Edition
ISBN: 9781305661639
Author: Scott Besley, Eugene Brigham
Publisher: Cengage Learning
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Question
Chapter 4, Problem 2PROB
Summary Introduction
Fifteen years ago, X purchased an investment for $2,500. The interest rate is 6% and current value has to be calculated.
Here,
The future value is “FV”.
The
The interest rate is “r”.
The maturity period of time period is “n”.
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Students have asked these similar questions
Ten (10) years ago Bruce invested $1,000. Today, the investment is worth $3,250. If interest is compounded annually, what annual rate of return did Bruce earn on his investment? Do not round intermediate calculations. Round your answer to one decimal place.
Frank invested $10,000 at 15% simple interest. How much interest will he earn each year?
On your tenth birthday, you received $300 which you invested at 4.5 percent interest, compounded annually. Your investment is now worth $756. How old are you today?
Chapter 4 Solutions
CFIN
Ch. 4 - Prob. 1PROBCh. 4 - Prob. 2PROBCh. 4 - Prob. 3PROBCh. 4 - Prob. 4PROBCh. 4 - Prob. 5PROBCh. 4 - Prob. 6PROBCh. 4 - Prob. 7PROBCh. 4 - Prob. 8PROBCh. 4 - Prob. 9PROBCh. 4 - Prob. 10PROB
Ch. 4 - Prob. 11PROBCh. 4 - Prob. 12PROBCh. 4 - Prob. 13PROBCh. 4 - Prob. 14PROBCh. 4 - Prob. 15PROBCh. 4 - Prob. 16PROBCh. 4 - Prob. 17PROBCh. 4 - Prob. 18PROBCh. 4 - Prob. 19PROBCh. 4 - Prob. 20PROBCh. 4 - Prob. 21PROBCh. 4 - Prob. 22PROBCh. 4 - Prob. 23PROBCh. 4 - Prob. 24PROBCh. 4 - Prob. 25PROB
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- You are hoping to buy a house in the future and recently received an inheritance of $16, 000. You intend to use your inheritance as a down payment on your house. a. If you put your inheritance in an account that earns 8 percent interest compounded annually, how many years will it be before your inheritance grows to $33, 000? b. If you let your money grow for 9.5 years at 8 percent, how much will you have? c. How long will it take your money to grow to $33, 000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $33, 000 if you move it into an account that pays 12 percent? d. What does all this tell you about the relationship among interest rates, time, and future sums?arrow_forwardFifteen years from now, you will be inheriting $45,000. What is this inheritance worth to you today if you can earn 8.0 percent interest, compounded annually?arrow_forwardTwelve years from now, you will be inheriting $60,000 What is this inheritance worth to you today if you can earn 6.0 percent interest, compounded annually?arrow_forward
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