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(Furture Value) You are hoping to buy a house in the furture and recently reciev

ID: 2777217 • Letter: #

Question

(Furture Value) You are hoping to buy a house in the furture and recently recieved an inheritnce of $20,000. You intend to use your inheriteance as a down payment on your house. A) If you put your ineheritance in an account that ears 7% interst compounded annually, how many years will it be before your inheritance grows to $33,000? B. If you let your money grow for 10 years at 7 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 tht pays 12%? D. What does all this tell you about the relationship amoung intrest rates, time and future sums? Postive or Negitive?

Explanation / Answer

If you put your ineheritance in an account that ears 7% interst compounded annually, how many years will it be before your inheritance grows to $33,000?

C. How long will it take your money to grow to $33,000 if you move it into an account tht pays 12%?

   What does all this tell you about the relationship amoung intrest rates, time and future sums? Postive or Negitive?

Present value 20000 Future Value 33000