Question

L TIME UNLUE OF $ - chap 2 Greshe A single investment of $5,000 is made to day at the western Traders Credit Union account a will remain invested for five years. At the end of the fifth year, What is the future value if it is simple interest of 8% annually (a) Draw the cash flow diagram :

Answer 1

R = 8% (simple interest rate)

Time = 5 years

Initial investment = $5000

Let, Future value = X

A.

Year 0 R = 8% per year (simple interest rate) $5000

Future value (X) = 5000 *(1+ 5*8%)

Future value (X) = $7000