Why do we use$/$need interest rate? Explain.

Compound interest pays interest for each time period on the original investment plus the accumulated interest.

TRUE or FALSE

Approximately how long must one wait $($to the nearest year$)$ for an initial investment of $$1,000$ to triple in value if the investment earns $8\%$ compounded annually?

A$.9$ years

B$.14$ years

C$.22$ years

D$.25$ years

How much will accumulate in an account with an initial deposit of $$100,$ and which earns $10\%$ interest compounded quarterly for $3$ years?

A$.$ $$107\mathrm{.}69$

B$.$ $$133\mathrm{.}10$

C$.$ $$134\mathrm{.}49$

D$.$ $$313\mathrm{.}84$

What is the present value of your trust fund if it promises to pay you $$50,000$ on your ${30}^{th}$ birthday $(7$ years from today$)$ and earns $10\%$ compounded annually?

A$.$ $$25,000\mathrm{.}00$

B$.$ $$25,657\mathrm{.}91$

C$.$ $$28,223\mathrm{.}70$

D$.$ $$29,411\mathrm{.}76$