Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual com- pound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5, and 15 years. b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part a using 8 percent and 10 percent. c. What conclusions can you draw about the relationship among interest rates, time, and future sums from the calculations you just did?
Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual com- pound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5, and 15 years. b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part a using 8 percent and 10 percent. c. What conclusions can you draw about the relationship among interest rates, time, and future sums from the calculations you just did?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 8E
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Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual com- pound interest of 6 percent.
a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5, and 15 years.
b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part a using 8 percent and 10 percent.
c. What conclusions can you draw about the relationship among interest rates, time, and future sums from the calculations you just did?
use EXCEL to work this out and show the formula!
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