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    1 What Is The Total Amount Accumulated After Five Years

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    Amit Pandey
    With simple annual interest of 8% on $1,000 invested for 5 years, the total accumulated is $1,400. With compound annual interest of 8% on the same amount and time period, the total accumulated is $1,469. The document provides sample questions and explanations about calculating simple vs compound interest, time value of money, present and future values, rates of return, and time periods for investments to triple in value.

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    1 What Is The Total Amount Accumulated After Five Years

    Uploaded by

    Amit Pandey
    12 views2 pages
    With simple annual interest of 8% on $1,000 invested for 5 years, the total accumulated is $1,400. With compound annual interest of 8% on the same amount and time period, the total accumulated is $1,469. The document provides sample questions and explanations about calculating simple vs compound interest, time value of money, present and future values, rates of return, and time periods for investments to triple in value.

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    With simple annual interest of 8% on $1,000 invested for 5 years, the total accumulated is $1,400. With compound annual interest of 8% on the same amount and time period, the total accumulated is $1,469. The document provides sample questions and explanations about calculating simple vs compound interest, time value of money, present and future values, rates of return, and time periods for investments to triple in value.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    12 views2 pages

    1 What Is The Total Amount Accumulated After Five Years

    Uploaded by

    Amit Pandey
    With simple annual interest of 8% on $1,000 invested for 5 years, the total accumulated is $1,400. With compound annual interest of 8% on the same amount and time period, the total accumulated is $1,469. The document provides sample questions and explanations about calculating simple vs compound interest, time value of money, present and future values, rates of return, and time periods for investments to triple in value.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Solved: 1 What is the total amount accumulated after five

    years

    1. What is the total amount accumulated after five years if someone invests $1,000 today with a
    simple annual interest rate of 8 percent? How about with a compound annual interest rate of 8
    percent?
    a. $600, $680
    b. $1,400, $1,469
    c. $1,469, $1,400
    d. $5,400, $1,016

    2. An investment of $5,000 invested for three years has an expected future value of $6,100. The
    simple annual interest rate is closest to ______ and the compound annual interest rate is
    closest to ______.
    a. 6.01%; 6.41%
    b. 7.33%; 6.85%
    c. 6.85%; 7.33%
    d. 6.41%; 6.01%

    3. At the end of 2009, Malcolm invested $10,000 in two bank accounts. The expected value of
    each bank account for the years 2009 to 2020 are represented in the following graph. In the
    graph, “Series 1” represents an account paying ______ interest, while “Series 2” represents
    an account paying ______ interest.

    a. Simple; compound
    b. Compound; simple
    c. Simple; simple
    d. Compound; compound

    4. Which of the following has the largest future value if $1,000 is invested today?
    a. Five years with a simple annual interest rate of 10%
    b. 10 years with a simple annual interest rate of 8%
    c. Eight years with a compound annual interest rate of 8%
    d. Eight years with a compound annual interest rate of 7%

    Interest rates in the following questions are compound rates unless otherwise stated.

    5. Suppose an investor wants to have $15 million to retire 25 years from now. How much would
    she have to invest today if her annual rate of return is equal to 5 percent?
    a. $6,666,666.67
    b. $4,429,541.58
    c. $600,000
    d. $21,345

    Reach out to [email protected] for enquiry.


    6. Which of the following is false?
    a. The longer the time period, the smaller the present value, given a $100 future value and
    holding the interest rate constant.
    b. The greater the interest rate, the greater the present value, given a $100 future value and
    holding the time period constant.
    c. A future dollar is always less valuable than a dollar today if interest rates are positive.
    d. The discount factor is the reciprocal of the compound factor.

    7. Maggie deposits $10,000 today and is promised a return of $17,000 in eight years. What is
    the implied annual rate of return?
    a. 6.86%
    b. 7.06%
    c. 5.99%
    d. 6.07%

    8. How long will it take Mike to triple his investment if he can earn an annual rate of return of
    9%?
    a. 15.5 years
    b. 13.9 years
    c. 12.7 years
    d. 10years

    1 What is the total amount accumulated after five years

    ANSWER
    https://solvedquest.com/1-what-is-the-total-amount-accumulated-after-five-years/

    Reach out to [email protected] for enquiry.


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