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You are hoping to buy a house in the future and recently received an inheritance of $20,000. You intend to use your inheritance as a down payment on your house.

a. If you put your inheritance in an account that earns 9 percent interest compounded annually, how many years will it be before your inheritance grows to $32,000?

b. If you let your money grow for 10.25 years at 9 percent, how much will you have?

c. How long will it take your money to grow to $32,000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $32,000 if you move it into an account that pays 11 percent ?

d. What does all this tell you about the relationship among interest rates, time, and future sums?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92829252

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