Question: Consider a $2,000 deposit earning 8 percent interest per year for five years. What is the future value, and how much total interest is earned

Consider a $2,000 deposit earning 8 percent interest per year for five years. What is the future value, and how much total interest is earned on the original deposit vs. how much is interest earned on interest?

Step by Step Solution

★★★★★

3.41 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The 2000 investment will grow to a future value of 293866 FV 5 2... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

335-B-F-F-M (4035).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!

Consider a $5,000 deposit earning 10 percent interest per year for 10 years. What is the future value, how much total interest is earned on the original deposit, and how much is interest earned on...

What is the future value of 20 periodic payments of $5,720 each made at the beginning of each period and compounded at 8%? (Round factor values to 5 decimal places, e.g. 1.25124, and final answer to...

What is the future value of an initial $100 after 3 years if it is invested in an account paying 10%annual interest?

Consider a $1, 200 deposit earning 8 percent interest per year for five years. What is the future value? (Do not round intermediate calculations. Round your answer to 2 decimal places.) How much...

Consider a $2,000 deposit earning 8 percent interest per year for five years. What is the future value? How much total interest is earned on the original deposit? How much is interest earned on...

1.Consider a $2,300 deposit earning 8 percent interest per year for five years. 2. 3. 4. Consider a $2,300 deposit earning 8 percent interest per year for five years. What is the future value (Do not...

FINISH EACH PART FOR A THUMBS UP. YOU WILL NOT RECIEVE A THUMBS UP UNLESS EACH PART IS DONE. THANKS! Consider a $2,000 deposit earning 8 percent interest per year for five years. What is the future...

Problem 4-21 Interest-on-Interest (LG4-3) Consider a $2,900 deposit earning 8 percent interest per year for five years. What is the future value? (Do not round intermediate calculations. Round your...

Consider a $2,900 deposit earning 8 percent interest per year for five years. What is the future value? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Future value...

Problem 4-11 Present Value (LG4-4) What is the present value of a $1,550 payment made in seven years when the discount rate is 9 percent? (Do not round intermediate calculations. Round your answer to...

The melting of water initially at the fusion temperature, T f = 0C, was considered in Example 1.5. Freezing of water often occurs at 0C. However, pure liquids that undergo a cooling process can...

Why must the interest component of cash flow or earnings be calculated on an after-tax basis?

The CGMA White Paper highlights the role of CFOs in shaping business models. Why is financial leadership critical in business model governance? How can finance professionals ensure that a company's...

Reflect on a recent curriculum reform or initiative you have witnessed or have heard about. To what extent was it successful or not successful? What made it successful or not successful? To what...

Suppose a new project was going to be financed partially with retained earnings. What flotation costs should you use for retained earnings? (LG8)

When will the subjective approach to forming divisional WACCs be better than using the firmwide WACC to evaluate all projects? (LG7)

Explain why the divisional cost of capital approach may cause problems if new projects are assigned to the wrong division. (LG6)

Fas please, Suppose the current dividends on a stock are $2.8 per share and dividends are expected to increase by 2% per year, forever. If the required rate of return is 8%, what is the value of the...

You just looked at the Wall Street Journal and found the following list of a corporate bond. How much do you need to pay to purchase each bond

The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity. Calculate the interest rate offered by each of these strips. Years to Maturity...