P4-3 (similar to) Question Help Calculate the future value of $ 8 comma 000$8,00
ID: 2780658 • Letter: P
Question
P4-3 (similar to)
Question Help
Calculate the future value of
$ 8 comma 000$8,000
ina.
33
years at an interest rate of
8 %8%
per year.b.
66
years at an interest rate of
8 %8%
per year.c.
33
years at an interest rate of
16 %16%
per year.d. Why is the amount of interest earned in part
(a)
less than half the amount of interest earned in part
(b)?
a. Calculate the future value of
$ 8 comma 000$8,000
in
33
years at an interest rate of
8 %8%
per year.The future value of
$ 8 comma 000$8,000
in
33
years at an interest rate of
8 %8%
per year is
$nothing.
(Round to the nearest dollar.)
P4-3 (similar to)
Question Help
Explanation / Answer
a) Future value = 8,000 * 1.083 = 10,077.70
b) future value = 8,000 * 1.086 = 12,694.99
c) future value = 8,000*1.163 = 12,487.17
d) though the interest rate is half in A) the interest earned in B) is more than twice since there is interest earned on the interest too i.e. there is a compounding effect that magnified the interest in b)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.