Suppose that you now have $4,000. How much will you have after 10 years if you l

Question

Suppose that you now have $4,000. How much will you have after 10 years if you leave it invested at 6.15% with annual compounding? Your answer should be between 6,170.00 and 10.250.00, rounded to 2 decimal places, with no special characters DQuestion 2 5 pts Last year Dania Corporation's sales were S325 million. If sales grow at 9.7% per year, how large (in millions) will they be 8 years later? Your answer should be between 445.00 and 762.00. rounded to 2 decimal places, with no special characters.

Explanation / Answer

Que 1.

Given:

Principal amount= $4,000

Interest Rate= 6.15% = 0.0615

Years = 10 years

n= 1, as it is compounded annually

Amount after 10 years = A

A= P(1 + r/n)nt

= 4000 ( 1 + 0.0615/1) (1)(10)

= 4000 (1.0615)10

= 4000 (1.816) = $7,264

We will have $7,264 after 10 years.

Que 2.

Given;

Last year sales= $325,000,000

Growth Rate= 9.7% = 0.097

Time = 8 years

Sales after 8 years would be = P ( 1+r ) t

= 325000000 ( 1 + 0.097 ) 8

= 325000000 ( 1.097 ) 8

= 325000000 (2.097) = $681.53 million

Dania Corporation's sale will grow to $681.53 million in 8 years.   

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