Question

Please solve these

i. You deposit $6000 in an account earning 2% interest compounded monthly. How much will you have in the account in 10 years?

ii. Find the time required for an investment of 5000 dollars to grow to 7900 dollars at an interest rate of 7.5 percent per year, compounded quarterly.
Round your answer to two decimal places
Your answer is t=

iii. You currently have $2,800 (Present Value) in an account that has an interest rate of 6% per year compounded quarterly (4 times per year). You want to withdraw all your money when it reaches $5,880 (Future Value). In how many years will you be able to withdraw all your money?
The number of years is

Answer 1

1.

Future Value = 6,000(1 + 0.02/12)¹²⁰ = $7,327.20

2.

Calculating Time Period,

Using TVM Calculation,

N = [PV = -5,000, FV = 7,900, PMT = 0, I = 0.075/4]

N = 6.16 years

3.

Calculating Time Period,

Using TVM Calculation,

N = [PV = -2,800, FV = 5,880, I = 0.06/4, PMT = 0]

N = 12.46 years