Unit 4

Question 1:

Question 2:

Question 3:

(Related to Checkpoint 5.2) (Future value) Leslie Mosallam, who recently sold her Porsche, placed $9,800 in a savings account paying annual compound interest of 5 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 3, 7, and 17 year(s). b. Suppose Leslie moves her money into an account that pays 7 percent or one that pays 9 percent. Rework part (a) using 7 percent and 9 percent. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you just did? (Related to Checkpoint 5.2) (Future value) Bob Terwilliger received $18,891 for his services as financial consultant to the mayor's office of his hometown of Springfield. Bob says that his consulting work was his civic duty and that he should not receive any compensation. So, he has invested his paycheck into an account paying 5.88 percent annual interest and left the account in his will to the city of Springfield on the condition that the city could not collect any money from the account for 160 years. How much money will the city receive in 160 years from Bob's generosity? The amount of money the city will receive in 160 years from Bob's generosity is $ (Round to the nearest cent.) (Related to Checkpoint 5.2) (Future value) To what amount will $5,000 invested for 9 years at 10 percent compounded annually accumulate? $5,000 invested for 9 years at 10 percent compounded annually will accumulate to $ (Round to the nearest cent.)