You just received a $5,000 bonus.
a. Calculate the future value of $5,000, given that it will be held in the bank for five years and earn an annual interest rate of 6 percent.
b. Recalculate part (a) using a compounding period that is (1) semiannual and (2) bimonthly.
c. Recalculate parts (a) and (b) using a 12 percent annual interest rate.
d. Recalculate part (a) using a time horizon of 12 years at a 6 percent interest rate.
e. What conclusions can you draw when you compare the answers in parts (c) and (d) with the answers in parts (a) and (b)?

  • CreatedOctober 31, 2014
  • Files Included
Post your question