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

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You are hoping to buy a house in the future and recentlyreceived an inheritance of ?$20 000. You intend to use yourinheritance as a down payment on your house. a.??If you put yourinheritance in an account that earns 8 percent interest compounded?annually, how many years will it be before your inheritance growsto ?$33 000?? b.??If you let your money grow for 10.25 years at 8percent?, how much will you? have? c.??How long will it take yourmoney to grow to ?$33000 if you move it into an account that pays 5percent compounded? annually? How long will it take your money togrow to ?$33000 if you move it into an account that pays 11percent?? d.??What does all this tell you about the relationshipamong interest? rates, time, and future? sums? a.??If you put yourinheritance in an account that earns 8 percent interest compounded?annually, how many years will it be before your inheritance growsto ?$33000??

Answer & Explanation Solved by verified expert

4.4 Ratings (942 Votes)

a Time required Future Value Present Value 1 rn 33000 20000 1 008n 165 108n Apply Logarithm on both sides we get ln 165 n ln 108 0217484 n 0033424 n Number of Years See Answer

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Transcribed Image Text

You are hoping to buy a house in the future and recentlyreceived an inheritance of ?$20 000. You intend to use yourinheritance as a down payment on your house. a.??If you put yourinheritance in an account that earns 8 percent interest compounded?annually, how many years will it be before your inheritance growsto ?$33 000?? b.??If you let your money grow for 10.25 years at 8percent?, how much will you? have? c.??How long will it take yourmoney to grow to ?$33000 if you move it into an account that pays 5percent compounded? annually? How long will it take your money togrow to ?$33000 if you move it into an account that pays 11percent?? d.??What does all this tell you about the relationshipamong interest? rates, time, and future? sums? a.??If you put yourinheritance in an account that earns 8 percent interest compounded?annually, how many years will it be before your inheritance growsto ?$33000??