(Related to The Business of Life: Saving for Your First House) (Future value) You are hoping to buy a house in the future and recently received an inheritance of $22000
22,000. You intend to use your inheritance as a down payment on your house.
a. If you put your inheritance in an account that earns 8
8percent interest compounded annually, how many years will it be before your inheritance grows to $31000
b. If you let your money grow for 9.75
9.75 years at 8
8 percent, how much will you have?
c. How long will it take your money to grow to $3000
31,000 if you move it into an account that pays 3
3 percent compounded annually? How long will it take your money to grow to $31000
31,000 if you move it into an account that pays 13
d. What does all this tell you about the relationship among interest rates, time, and future sums?