Homework Answers
Future value = Present value(1+Interest rate)^number of years
Value after 4 years = 20,000(1+6%)^4 = $25,249.54
After 6 years = 20,000(1.06)^6 = $28,370.38
b.4 years = 25,249.54 – (25,249.54-20,000)*25% = $23,937.16
6 years = 28,370.38 – (28,370.38 – 20,000)*25% = $26,277.79
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