You are hoping to buy a house in the future and recently received an inheritance of...

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Finance

You are hoping to buy a house in the future and recentlyreceived an inheritance of ?$16,000 You intend to use yourinheritance as a down payment on your house.
1.?If you put your inheritance in an account that earns 7percent interest compounded? annually, how many years will it bebefore your inheritance grows to $34,000?
2.If you let your money grow for 10 years at 7 percent how muchwill you? have?
3.How long will it take your money to grow to $34,000 if youmove it into an account that pays 5 percent compounded? annually?How long will it take your money to grow to $34,000 if you move itinto an account that pays13 percent??
4.?What does all this tell you about the relationship amonginterest? rates, time, and future? sums
?

Answer & Explanation Solved by verified expert

3.7 Ratings (656 Votes)

1 Initial Investment 16000 Interest Rate 7 and Target Future Value 34000Let the time required be T yearsTherefore 16000 x 107T 34000107T 2125T 111408 years 1114 See Answer

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You are hoping to buy a house in the future and recentlyreceived an inheritance of ?$16,000 You intend to use yourinheritance as a down payment on your house.1.?If you put your inheritance in an account that earns 7percent interest compounded? annually, how many years will it bebefore your inheritance grows to $34,000?2.If you let your money grow for 10 years at 7 percent how muchwill you? have?3.How long will it take your money to grow to $34,000 if youmove it into an account that pays 5 percent compounded? annually?How long will it take your money to grow to $34,000 if you move itinto an account that pays13 percent??4.?What does all this tell you about the relationship amonginterest? rates, time, and future? sums?