Please show work on all problems... 2. You place $590 in a savings account today
ID: 2637054 • Letter: P
Question
Please show work on all problems...
2. You place $590 in a savings account today that earns an annual interest rate of 15 percent compounded annually. How much will you have in this account at the end of 19 years? Assume that at all interest at the end of the year is reinvested the next year. round 2 decimals
3. What is the present value of the following future amount?
$61,579 to be received from now, discounted back to the present at 4 percent, compounded annually. round 2 decimals
4. How many years will the following take?
$9,412 to grow to $87,027 if invested at 18 percent compounded annually. round 2 decimals
5. Cooling Tools Inc. is currently producing 1,412 of small refrigerators per month but the company
Explanation / Answer
2>Future Value=590*(1+0.15)^19 8396.75 3>Present Value=61579/(1.02^2) 59187.81 4>9412*(1.18^n)=87027 or 1.18^n=87027/9412 9.25 or 1.18^n=1.18^3.79 or n=3.79 year 5>1412(1.08*n)=5818 or 1.08^n=(5818/1412) 4.12 or 1.08^n=1.08^18.4 or n=18.4 months 6>Doubling Period=0.35+(69/4.33) 16.29 Ans:16.29Year 7>1172*(1+r)^4=50797 or (1+r)^4=50797/1172 43.34 or 1+r=(43.34)^(1/4) 2.57 or r=2.57-1=1.57 Rate of interest=157% 8>2*(1+r)^3=4 or 1+r=(4/2)^(1/3) 1.26 or r=1.26-1=0.26 or growth rate = 26%