Compound value) Stanford Simmons, who recently sold his Porsche, placed $8,600 in a savings account paying annual compound interest of 6 percent. a. Calculate the amount of money that will have accrued if he leaves the money in the bank for 2, 5, and 15 years. b. If he moves his money into an account that pays 8 percent or one that pays 10 percent, rework part (a) using these new interest rates. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you have completed in this problem?
Compound value) Stanford Simmons, who recently sold his Porsche, placed $8,600 in a savings account paying annual compound interest of 6 percent. a. Calculate the amount of money that will have accrued if he leaves the money in the bank for 2, 5, and 15 years. b. If he moves his money into an account that pays 8 percent or one that pays 10 percent, rework part (a) using these new interest rates. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you have completed in this problem?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
(Compound
value)
Stanford Simmons, who recently sold his Porsche, placed
$8,600
in a savings account paying annual 6
percent.a. Calculate the amount of money that will have accrued if he leaves the money in the bank for
2,
5,
and
15
years.b. If he moves his money into an account that pays
8
percent or one that pays
10
percent, rework part
(a)
using these new interest rates.c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you have completed in this problem?
a. What is the accrued value of
$8,600
in a savings account paying annual compound interest of
6
percent for
2
years?$nothing
(Round to the nearest cent.)Expert Solution
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