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Assignment 5

This document contains 3 questions about compound interest calculations. Question 1 asks how much money needs to be deposited now at 5% interest to have $10,000 in 10 years. Question 2 asks how much money would be saved by contributing $10 per week at 6% interest over 15 years. Question 3 asks the reader to calculate their CMS ID and use the last digit as a percentage interest rate to determine how many years it would take an initial $650 investment to grow to $15,000. Figures and cash flow diagrams are provided to illustrate the compound interest calculations.

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John Wick
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35 views

Assignment 5

This document contains 3 questions about compound interest calculations. Question 1 asks how much money needs to be deposited now at 5% interest to have $10,000 in 10 years. Question 2 asks how much money would be saved by contributing $10 per week at 6% interest over 15 years. Question 3 asks the reader to calculate their CMS ID and use the last digit as a percentage interest rate to determine how many years it would take an initial $650 investment to grow to $15,000. Figures and cash flow diagrams are provided to illustrate the compound interest calculations.

Uploaded by

John Wick
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Assignment # 5

Question 1: You just inherited $10,000. While you plan to squander some of it away, how much
should you deposit in an account earning 5% interest per year if you would like to have $10,000
in the account in 10 years?

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Figure 1: Cash Flow Diagram
Question 2: Suppose you contribute $10 per week into an interest-bearing account that earns
6% a year. If you contribute faithfully each week into this account, how much money would you
have saved through the compounding of interest by the end of 15 years?

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Figure 2:Cash Flow Diagram

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Question 3: Using last digit of your CMS ID as percentage interest rate, find the number of years
required for your investment of $650 to yield $15000. If the last digit of your ID is 0, then use 3rd
last digit. Remember to mention your ID in the answer.

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Figure 3:Cash Flow Diagram

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