(Related The Business of Life: Saving for your First House) (Future Value) You a
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(Related The Business of Life: Saving for your First House) (Future Value) You are hoping to buy a house in the future and recently received an inheritance of $22,000. You intend to your inheritance as a down payment on your house. A. If you put your inheritance that earns 7 percent interest compounded annually, how many years will it be before your inheritance grows to $31,000?b. If you let your money grow for 10.5 years at 7 percent, how much will you have? C. How long will it take your money to grow $31,000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $31,000 if you move it in account that pays 11 percent? d. what does all this tell you about the relationship among interest rates, time, and future sums?Explanation / Answer
a)
No of year = nper(rate,pmt,pv,fv)
No of year = nper(7%,0,-22000,31000)
No of year = 5.1 Years
b) Amount = P*(1+r)^n
Amount = 22000*(1+7%)^10.5
Amount =$ 44,766.42
c)
No of year = nper(rate,pmt,pv,fv)
No of year = nper(3%,0,-22000,31000)
No of year = 11.6 Years
No of year = nper(rate,pmt,pv,fv)
No of year = nper(11%,0,-22000,31000)
No of year = 3.3 Years
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