1 suppose you deposit 1000 in an account with an apr of 4, Ask an Expert

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1 .Suppose you deposit $1,000 in an account with an APR of 4%, with compounding quarterly.

a. After 10 years, what is the balance in the account if you make no withdrawals?

b. After 10 years, how much interest on interest did you earn?

2 .Suppose you are promised $10,000 five years from today. If the appropriate discount rate is 6%, what is this $10,000 worth to you today?

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