Time value You have $1,500 to invest today at 8% interest compounded annually.a. Find how much you will have accumulated in the account after (1) 3 years,(2) 6 years, and (3) 10 years.b. Use your findings in part a to calculate the amount of interest earned in (1)the first 3 years (years 1 to 3), (2) the second 3 years (years 4 to 6), and(3) the third 3 years (years 7 to 9).c. Compare and contrast your findings in part b. Explain why the amount ofinterest earned increases in each succeeding 3-year period.

(c)the interest earned is increasing for the same amount of time.This is because change in starting…

Answered: Time value You have $1,500 to invest…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the formula for computing future value using compound interest to determine the value of an account at the end of 9 years if a principal amount of $18,000 is deposited in an account at an annual interest rate of 3% and the interest is compounded quarterly. Question content area bottom Part 1 The amount after 9 years will be $enter your response here. (Round to the nearest cent as needed.)
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